Thank you, Frank. Good morning, everyone, and thank you for joining Penn National Gaming's 2020 Fourth Quarter Conference Call. We'll get to management's presentation and comments momentarily as well as your questions and answers. But as always, I'll first review the safe harbor disclosure. In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. These statements can be identified by the use of forward-looking terminologies such as expects, believes, estimates, projects, intends, plans, seeks, may, will, should or anticipates or the negative or other variations of these or similar words or by discussion of future events, strategies or risks and uncertainties, including future plans, strategies, performance, developments, acquisitions, capital expenditures and operating results. Such forward-looking statements reflect the company's current expectations and beliefs but are not guarantees of future performance. As such, actual results may vary materially from expectations. The risks and uncertainties associated with the forward-looking statements are described in today's news announcement and in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and Form 10-Q. Penn National Gaming assumes no obligation to publicly update or revise any forward-looking statements. Today's call and webcast will include non-GAAP financial measures within the meaning of SEC Regulation G. When required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today's press release as well as the company's website. With that, it's now my pleasure to turn the call over to the company's CEO, Jay Snowden. Jay?

Thanks, Joe. Good morning, everyone. Thanks for joining us for our fourth quarter earnings call. Unfortunately, we don't have our new Chief Financial Officer, Felicia Hendrix, on board quite yet, though I know she's out there listening and eager to join the team here in a few weeks. We're excited for that. So in her place, I'll be providing a brief financial update this morning, following a high-level year-end review and some additional color on what was really an exciting quarter for us in Q4 of 2020. Here with me, as usual, are members of my executive team this morning who can help answer your questions, including our Head of Operations, Todd George, who will answer questions about our core business; and Justin Sebastiano, our SVP, Finance and Treasurer, who will tag team with me as needed on the finance side. We're also joined for the first time by Harper Ko, our new Chief. Welcome, Harper. With that, let me begin by saying that as we close the final chapter on one of the most difficult and surreal years for all of us from a personal and professional standpoint, I'm immensely proud of the way our team members at all levels of our organization came together, weathered the storm and helped us emerge as a stronger company than ever before. While we'll continue to adjust to the uncertainties of today's world until COVID-19 is behind us, we used all the adversities and challenges thrown at us in 2020 as catalysts to completely reevaluate and reimagine the way we do business, and we supercharged the digital transformation of our company at the same time. Our team at Penn proved a lot in 2020. For me, as I reflect, the words agility, perseverance, tenacity, resilience, creativity, and change agent all come to mind. Our results in 2020 speak to the relentless focus and nimbleness of our best-in-class corporate and property management teams and they reflect the power of our incredible partnership with our great friends at Barstool Sports. While I am equally proud -- what I am equally proud of, on looking back on 2020 is how our company rose to the occasion to support our team members and host communities in these times of great need and heightened social justice awareness. Through our Penn National Gaming Foundation, we created a COVID-19 emergency relief fund for our team members and raised over $3.7 million from our Board of Directors, senior management team and our foundation. In addition, we provided $13 million in one-time holiday cash bonuses to our nonexecutive team members company-wide in the fourth quarter to help with the financial impact to their families from the pandemic. We also created the Hurricane Laura relief fund with an initial contribution of $2.5 million to help our community and team members impacted by the storm, in addition to providing more than $6 million in full wages and benefits to our team members while the L’Auberge Lake Charles was closed. Most importantly, we joined Dave Portnoy's latest mission at Barstool to help save and sustain small businesses across the country that have been impacted by COVID-19, contributing more than $4.6 million and counting to the Barstool funds. Finally, on the social justice front, our Diversity Committee announced a new $1 million annual scholarship program to support team members from historically disadvantaged and underrepresented groups. And we launched a series of new inclusion-related initiatives to educate our team members across the organization and continue to foster a respectful and inclusive workplace. Turning now to our fourth quarter results. Both our revenues and adjusted EBITDA were trending ahead of forecast before COVID-19-related closures in Illinois, Michigan, and Pennsylvania and increased restrictions in Ohio and Massachusetts among a few other states began in mid-November. While revenues contracted 23% year-over-year, adjusted EBITDA declined by only 9% for the same period, reflecting structural changes that were put in place with the onset of the pandemic. These adjustments to our core business helped to expand adjusted EBITDA margins by 580 basis points relative to Q4 '19 results despite the aforementioned headwinds, helped by an improvement of 720 basis points in the South segment, which was least affected by the COVID-19 restrictions despite the impact of Hurricane Laura in the fourth quarter in Lake Charles. We remain convinced that these structural changes to our business will result in meaningful EBITDAR growth once volumes return to pre-pandemic levels. Trends in January thus far are very encouraging, which Todd can provide more color on during our Q&A session. In fact, this past weekend, we saw our highest Friday and Saturday combined slot volumes across our company portfolio of properties since the first quarter of 2020. Our South segment has continued to be particularly strong with January revenues, the highest we have seen in the month of January in the last 5 years on a same-store basis, leading to exceptional flow-through to EBITDA. We are continuing to see encouraging growth in the younger demographic tiers of our database, and we believe the rollout of COVID vaccinations and treatments will encourage more guests in all age segments of our database to return to our land-based facilities. When they do, they'll soon be met with the 3Cs: our new cashless, cardless, and contactless technology, which will improve efficiency and provide a guest experience in line with other industries historically frequented by younger demographics, which we expect also to drive further incremental revenue for us. We're planning to launch the 3Cs at our Pennsylvania casinos in the first half of '21 subject to regulatory approval, and we'll continue that rollout for the remainder of 2021 to other regions. I'm sure Felicia would also want you to know that our cash balance stood at a healthy $1.9 billion at quarter end, even after paying down $115 million of our Term Loan B. In turn, our net traditional debt decreased to approximately $578 million at December 31, 2020, bringing our lease-adjusted net leverage to 4.7% based on 2019 adjusted EBITDAR compared to 5.7% at the end of 2019. Some of you may have also noticed in our financial statements that we recorded a sizable unrealized gain related to our equity positions in PointsBet and the score, which were received as part of our market access skin agreements. This is just an example of the significant value we think we will realize over the next several years from our portfolio of leading market access partners. Other highlights from the fourth quarter include the continued momentum we're seeing for our Barstool Sportsbook app in Pennsylvania, strong retention, CRM efforts and creative promotions including our matching of first-time deposits with donations to the Barstool Fund to support small businesses throughout the state, have led to an increased handle and market share. Most importantly, they highlight our unique and unmatched approach to efficient customer acquisition. More recently, on January 22, we introduced our Barstool Sportsbook Mobile app in Michigan to very strong demand. Dave Portnoy, as many of you know, went to the University of Michigan, and he and Big Cat have a very loyal fan base there. They've been hanging out at our Greentown property in Detroit, generating a lot of excitement and awareness, not just for our Barstool Mobile Sportsbook and fully integrated iCasino, which we launched on Monday, but also our retail Barstool Sportsbook in the Greentown Casino in general, which really highlights the power of our differentiated omnichannel strategy. We think this strategy is sure to only gain steam in a post-COVID environment. Importantly, Michigan's launch weekend had 68% more first-time depositors than Pennsylvania's initial weekend. And the daily active users were nearly two-thirds higher than the average daily active users in Pennsylvania during 2020. All the more impressive when you consider the state of Michigan's population is only a little over 70% that of Pennsylvania. Also worth noting, the attention and excitement from the Michigan launch has created a halo or spillover effect. The publicity surrounding our Michigan launch helped our registrations and daily active users climb in Pennsylvania as well. We are just beginning to scale, but we are excited to see the early benefits from being live in our second state. Our next to launch state will be in Illinois, where we plan to go live prior to March Madness, pending regulatory approval, of course. From there, we'll continue to roll out in new states every 3 to 5 weeks or so until we're operational in ten or more states by the end of 2021. We achieved another milestone in Michigan with the launch of our Barstool-branded iCasino product on February 1. Although it's obviously early, we have been extremely pleased with the initial results as nearly 15% or as of this morning, over 15% now of our Michigan Sportsbook customers placed a wager on the Barstool iCasino during its first 2 days of operation. Average daily users exceeded our more mature Hollywood-branded iCasino product in Pennsylvania by more than 70% over the same 2-day period. Finally, we have now fully implemented our industry-leading mychoice rewards program across all of our properties and our online channels. This program of over 20 million members connects our land-based casinos to our sports betting and iCasino products, offering players a wide range of compelling incentives to consolidate play across our various platforms. Our mychoice player affinity program has become even more compelling as we recently announced a strategic partnership with Choice Hotels that provides for even more earning and redemption options for our most valued and loyal guests as well as an additional funnel to fill our nearly 10,000 hotel rooms across the enterprise. Looking forward, we're anticipating an exciting new year as we continue to introduce Barstool-branded retail and mobile sportsbooks across our portfolio, including brand-new builds at our two properties opening in Pennsylvania during the second half of '21. We have already seen very strong results from our retail sportsbooks, with our Indiana properties seeing meaningful increases in both gaming and non-gaming revenues following their rebranding at Barstool Sportsbooks. We are incredibly optimistic about the opportunities to unlock further upside as we introduce additional Barstool Sportsbook and sports bars across the portfolio. In the meantime, on the legislative front, we're focused on the enabling legislation for voter-approved sports betting laws in Louisiana and Maryland, and we're aggressively lobbying in 2021 for new opportunities for sports betting in Ohio, New York, Texas, Massachusetts, and Missouri, among others. We believe our industry-best geographic footprint, combined with the work we have done over the past year, has set the stage for a very exciting '21. And with that, I'd like to ask Frank for you to please turn it over to the line of questions.

[Operator Instructions] Our first question comes from Joe Greff with JPMorgan.

First question for you, Jay. You kind of talked about it in a couple of different places in your prepared comments, but we're all kind of thinking about the return of that 50 years old and older database gaming segment. Can you remind us, when we think about spend per visit and visitation and margins, how does that segment compare to the other segments in your database? How does that compare to that retail segment? Is that something that could be a positive mix shift driver for overall performance?

Yes, I'm going to let Todd George answer that one, Joe.

Thanks, Jay. So traditionally, Joe, this segment has performed higher. This is the group with more time, more cash, so we're encouraged that in Q4, the trend has been positive, where we're starting to see greater visitation from this group than we've seen in the prior 2 quarters. This is also a group that is more actively engaged with us, starting to get into that age range. We're seeing more app downloads from them. So they're starting to grasp technology better. And they're coming back out. Again, as Jay touched on in his opening remarks, this was a group that was out in force this last weekend and through much of January.

Great. And then, Jay, on the U.S. sports betting side, we're seeing not necessarily Pennsylvania and Michigan, but just in other markets that the environment has gotten a little bit more promotional and some kind of craziness with customer acquisition costs. When you look at the broad overall trends there, how does that factor into your thinking on how you're going to market and promote and acquire customers? How is your thinking evolved maybe over the last, I don't know, year or so that you've seen more experience? And then how does that translate into what you're doing in Michigan and thus far in Pennsylvania, which I know both markets are kind of early days? And then when you think about the initial performance in Michigan outperforming Pennsylvania, is it really just a function that Michigan is sort of a jump ball market for everybody, and so therefore, you're a little bit more on an even playing field? And so therefore, share momentum is a little bit stronger. But I'd love to hear your thoughts on all these things.

Sure, Joe. I'll tackle the second one and then the first one. And the answer to the second question around the differences between Michigan and Pennsylvania, I would point to that as the primary reason. We've been pointing to Michigan for, I don't know, 6 months now, ever since we knew that Michigan was a state that was going to be ready to go sometime in the late fourth quarter or early first quarter. Because any other state that we could launch in out of the gate like Pennsylvania, you're playing catch-up. We launched in Pennsylvania, I think it was 14 or 15 months after sports betting had gone live from a mobile standpoint. So Michigan, for us is a great proving ground. We're at the starting gate at the same time. The gun goes off, and we're not playing catch-up. We can get out of the starting gate the same way that everybody else can. But of course, we definitely do things differently. We have this amazing partnership and this fully integrated media strategy with what is the most compelling and fastest-growing sports and lifestyle media company on the Internet. So you look at the popularity of Barstool where it was when we announced our investment in Barstool, one year ago to where it is today. And it's been so robust. It's beyond anything that any of us could have ever expected. And so we're in this really great position, Joe, where I think it's well documented that this is kind of tying into your first question, customer acquisition costs. It's -- I think most analysts have done a good job researching this and it's anywhere from $300 to $800 per customer for the space. What I would tell you is that for Penn, so far in the first 4 months in Pennsylvania, despite all of the Barstool fund matching that we've done as well as in Michigan in our first month, we are well below the bottom end of that range. We have so much cushion to be opportunistic and figure out what we want to do and how we want to do it. And so we're starting to test some paid media, paid advertising in Pennsylvania, in Michigan. We're just dabbling. We're happy with the early returns, but we're in this great spot where we think we can generate meaningful market share and profitability just relying on that Barstool media partnership. And then anything else we do above and beyond there is for us just to continue to grow our share and do it in a way that delivers a nice return on investment. And I think that's a very different strategy than everybody else in the space.

Our next question comes from Shaun Kelley with Bank of America.

Jay, maybe to follow-up on that last point. I think as we're looking at the report that came through, we're staring a little bit at the kind of Corporate and other line in your reported financials. That number does seem to be coming in materially better than I think what we or probably the Street had modeled. There's a lot going on in that line item. And what I'm kind of trying to get at is, are we seeing an actual material contribution on the profit side from some combination of Penn Interactive, Barstool media, and some of these other things that are going on, some of the -- maybe the market access piece? Or can you help us understand that a little bit better? Because it seems like it almost entirely offsets your corporate costs in the quarter. If you could just help us unpack that a little bit.

Yes. Well, you are correct in all of your assumptions there around what's sort of packed into that other category. And we will at the right time, I would anticipate probably before the end of this year, start to report PI out separately. We're not ready to do that yet, but you should assume that what drove the other results is everything associated with Penn Interactive and what comes with that. We had an amazing quarter. And that's with doing -- we've done everything that we intended to do from a marketing standpoint in the fourth quarter. We haven't held back. We're at the point now where it's what else do we want to do because our customer acquisition costs are so much lower than everyone else's, we can really be thoughtful around what we do, how we do it, when we do it. And we've got partners that are just in no shortage of ideas all the time. I don't know how many of you guys saw, but for example, one of the things that we're doing this weekend around the Super Bowl bit, I just don't know our competitors can do this because our media partners and their following is so compelling and so loyal. But Dave set up to where he's got 5 personalities at Barstool, and there's a contest throughout the day in the Super Bowl betting on the game throughout the game. And whoever ends up with the winning the most money, if you bet $100 on our app on any bet on the Super Bowl, you get randomly assigned to one of these 5 personalities. And if your personality ends up at the Super Bowl with the most money, you get $1,000 dropped into your account. It's just -- those are ideas that no one else really maybe has thought of, but more importantly, they don't have the people and the following within their media partnerships that would even make a difference in doing something like that. And that's something that we're so excited about because we've got this list of dozens of ideas and we're just prioritizing which ones make the most sense, which ones are Dave and Big Cat and the team at Barstool most excited about because you sense when they've got a great idea, just how much energy they throw at it. And yes, we think we're in a really good position. And I think that what you see in that other line, Shaun, is that you're seeing really early on profitability. I'm not telling you that you should expect that every quarter because we may decide that as we launch, we want to be more aggressive in some of the things that we're learning on the paid media side. But as of right now, we're spending on the things that we know move the needle, and we're still able to look at our P&L and be really, really impressed.

And Jay, maybe just to kind of push it a little further since, I mean, I think you've kind of alluded to it, but maybe just to say it directly, do we think -- is reinvestment really the first priority and you start really analyzing the customer acquisition costs? And what you can do to maybe further drive and empower the brand? How should we think about kind of upstart and launch costs as we start to accelerate some of these new markets? Because I mean, you've done all this. You were, I guess, implied profitable in the quarter, and you were undoubtedly ready to ramp and ready to roll for getting going in Michigan, which is a huge launch for you. So I mean, it's impressive and we're trying to think about how do we extrapolate these numbers of this trend line going forward?

Yes. What I would say to sort of play it safe, Shaun, is that -- and I've said this on a previous call that I think we could definitely be profitable in '21 if we desire to be. I'm not sure that that's really what our #1 priority is. Right now, we're trying to grow the funnel and really focus on as much on new customer acquisition, first-time depositors as possible in all of these markets. What's interesting is that even as aggressive as we were in the way that we are aggressive, and we matched over $3 million in Michigan in the first weekend on first-time deposits and wagers. And I sit back, and I look at our customer acquisition cost for the Michigan launch, and it's still less than $200, right? So we have a lot of flexibility here in terms of what we want to do and how we want to do it. I would assume that 2021 maybe as sort of breakeven-ish on the interactive side. But we clearly have a path to ramping up profitability faster than anybody else, and I would expect to start to see that really ring through in 2022 and beyond from there.

Our next question comes from Steve Wieczynski with Stifel.

So you talked about that typical acquisition cost that's out there today in that range of $300 to $800, I think, is the range you referenced it. And you guys -- you mentioned you're well below the bottom end of that range. I guess the question is, how far up that range could you guys go before you lose profitability? What I mean by that is, could you get all the way up to the high end of that range and still be profitable today?

Steve, I think, at scale, the answer is absolutely yes. Remember, with everything that we just talked about in terms of the fourth quarter and profitability in our great Michigan launch, we're in 2 states. So we have all of this overhead costs. We've been ramping our Penn Interactive division around staffing. We now have over 250 people. We've got 100 product development and engineers. And that's all now being spread. All that cost is being spread across 2 states, right? So you can imagine as you scale this thing to 10 states, 11 states, 12 states, which is where we plan to be by the end of '21, you have all that much more dry powder to spend on growing the funnel and widening that funnel of acquisition. So we're testing things now. We spent some money on TV advertising in Pennsylvania and Michigan, around AFC NFC championship weekend. Not a lot, but we dabbled. We're really happy with what we saw on the returns on that. But I think most of what you're going to see us do is just going to be around the fully integrated media strategy or strategies. And you should expect what we do to be new, different, unorthodox, but super effective and super high return.

Okay. Got you. And then second question, Jay, this would normally be the call where you guys give guidance for the year. And obviously, we understand you're not going to provide guidance given the current backdrop. But is there a way for us to understand how you guys are thinking about the business this year without explicitly giving guidance? And I guess what I mean by that is, I would assume you guys have modeled out multiple scenarios in terms of what the year could look like. I'm just wondering, what are some of the key items that you guys are watching, which I assume most of it's tied to the virus and vaccinations and stuff like that. But what are some of the things that you're watching that would push you to either the high end or the low end of how the year could shake out? And I hope that makes sense.

It makes absolute sense, Steve. And we've already talked about Penn Interactive. So I think for modeling purposes, if you assume breakeven, then somewhere in that range, slightly positive, slightly not, but breakeven for the year is probably the way to model it. Everything else in our business boils down to COVID. And so if we assume from here through the remainder of the year that restrictions and closures get no worse than they are today, and you map that out for the remainder of the year and the restrictions continue to ease every few months. We look at the consensus number and say that number looks fine. It's -- but I just, to your point, to put a number out there right now when we don't have full control over our destiny, the way you do in most years, we felt like wasn't the right approach, and I would be surprised if many decided to do that. But it really does depend on sort of what decisions are being made at the state level and at the regulatory level in terms of how we can operate and when we can really see some loosening of these restrictions.

Our next question comes from John DeCree with Union Gaming.

Jay, I wanted to ask a question about the core casino business. And since the initial reopening of COVID, casino marketing and promotional spend has been something that the entire industry has rationalized quite considerably. I was wondering as we navigate the fourth quarter with additional lockdowns and then moving into January, which sounds like things are improving nicely. Have you seen across the industry, given your footprint, any change in behavior? Or would you say the industry is still really focused on keeping that level of promotional and marketing at the casino level rational?

John, I'm going to let Todd grab that one as well.

Thanks, Jay. John. So similar to what we saw coming out of the pandemic, every quarter has really been a change for the entire industry. And in the beginning, it was more driven by guest capacity restrictions. So there was -- it was pointless to market rather aggressively. But I think what everybody is seeing with that model, the customers continue to come back. And as long as you're offering the product that's in demand as well as the service component, everybody has remained completely rational, including going into this year. And typically, that Q1 number is a pretty robust number anyway, just with a seasonality component as long as the weather stays pretty reasonable. But we have not seen anybody in really any market come away from the approach that they've had through the pandemic, and we're encouraged by that going forward.

That's helpful color. And Jay, maybe one for you on some of the Barstool metrics that you've provided in your prepared remarks. I think you've mentioned about 7% of Barstool registrations have come from your mychoice database. I was wondering if you had any data or anecdotes yet on maybe how many mychoice customers that have been dormant have maybe found Barstool become reactivated or maybe stand-alone independent app customers that have found their way into a casino realizing it's early and with restrictions, but kind of curious how the cross-sell has gone the other way into the casino.

Yes. It's early. So we don't have a whole lot to share there. I'll give you what I know, which is really around our real money gaming Hollywood Casino in Pennsylvania because that's now been live for the longest period of time, which is about 50%, 5-0, of the users are users that are active in our Pennsylvania casinos. About 25% were brand-new to the ecosystem, and 25% were reactivated. So they had gone dormant. I think that percentage will be less on the sports betting side because you don't have a direct crossover correlation from casino gambler to a sports bettor. But no question, we are reactivating some guests. I just don't have any specifics for you as it relates to sports betting.

Our next question comes from Ryan Sigdahl with Craig-Hallum Capital Group.

Great. Just curious on Michigan, if you're able to kind of bifurcate out, maybe even just directionally because absolute numbers aren't out yet, but what your market share is there relative to kind of how you started in Pennsylvania?

Yes, that's a tough one, Ryan. I don't want to be on record of predicting what the first 10 days in Michigan came to. I think there's already some numbers out there that people are tracking related to geo-comply and the number of pings and things of that nature. I would just say that I think you have to look at Michigan, even with regard to pings differently than you have any other state launch because Michigan is the only state to date in the U.S. that went live on the same day with both sports betting and online casino. And so you should expect that the number of pings relative to other state launches was going to be higher in Michigan. We just -- none of us know how many of those were specifically for downloading and betting on sports betting versus downloading and betting on the online casino. What I would say is, I think we did, in our slides, if you look -- look through those, we tried to do a good comparison of the first weekend and then the first 10 days in Michigan versus Pennsylvania. We all know what our market share has looked like in Pennsylvania from a handle standpoint in that 12% to 13% range and really ending the year in December with our best month-to-date. You look across the board in the Michigan metrics, whether you're looking at downloads, registration, first time deposit, daily active users, number of wagers per day, it -- was all significantly higher in Michigan than it was in the state of Pennsylvania. And back to one of the other questions, I think it is being at the starting gate, at the same time, makes a huge difference. We're not trying to convince sports betters to leave the app they've been betting on and download our app, that's the challenge that you run into when you're launching later than everybody else. This was -- it's fair game. Today is the first day to download Barstool, and I think we're seeing really good results out of the gate.

Good. Yes, I realize it's difficult question to answer. So helpful context. And then there's been a lot of conversation, I guess, about your hold percent recently here. It was significantly better than kind of the industry average and everyone else. Maybe you can comment on what we're seeing in Pennsylvania there as far as your hold goes?

Yes. I mean, look, I would -- this reminds me of questions we would get on volatility in Blackjack. And some months, you get lucky and you hold well. And sometimes you don't. I think that for us, in Pennsylvania, we're continuing to build relationships with really good VIPs. And we're continuing to see more and more traction with the Barstool exclusive bets, and many of those are parlay bets, which tend to hold better, but are a lot of fun. We had -- just to give you a quick stat, during AFC NFC championship weekends, when we launched in Michigan, between Michigan and Pennsylvania, we had 11,000 bettors that bet on the 'Can't Lose Parlay' with Big Cat to get the free hat, right? So it just -- I think it speaks to sort of what might drive over the long term, that hold percentage. I wouldn't overly read into December. I don't think you should expect 20% of us every month. Maybe we end up above average over the long term. But I would also remind everyone, we lost money in the first month we launched in September. So it does go both ways and VIP play and how people do on parlays can really move that number significantly from one month to the next.

Our next question comes from Bernie McTernan with Rosenblatt Securities.

Great. Jay, an early point that you made evaluating kind of like what else you want to do given the early success in Pennsylvania and Michigan, and you clearly have proof-of-concept that Barstool is working. I'm interested in your thoughts on just adding other customer acquisition channels to supercharge what's currently going on. So for example, free-to-play with FOX's Super 6, it's routinely a top app in the iOS apps or under sports. MSG networks, they just announced they were launching some free-to-play. And then also, there was some recent M&A in the daily fantasy section. So just wondering if there's any kind of increased tolerance to or wanting to further leverage the Barstool brand on other customer acquisition channels?

Yes, Bernie, it's a great question. I'll tell you, we talk about it nonstop around the office here and with our partners at Barstool, as you can imagine. And we have a real appetite. We're just trying to make sure that we make the right decisions. And I think we've really benefited from playing the long game and thinking about what was the right media company to align with and how to fully integrate that media company. We weren't the first to announce a media partnership, but I think when we got to announcing it, we're really proud of the one that we put together and how it was structured and how both sides were incentivized. And so we're not going to chase something because of what you read yesterday about what somebody else did. I would tell you that we're maniacal about improving our strategy for the long term. And yes, we're very interested in figuring out how we can widen the funnel from an acquisition standpoint, whether that's through media partnerships or social media influencer partnerships. There's all sorts of things that we know we can do. We've just recently announced that we have relationships with Nick Merck, who's a video gamer in Michigan on an influencer basis. We just announced that we now have a partnership with an influencer Logan Paul, which we're really excited about, that's just going to get going. And obviously, the more we scale, the more impactful that will be because the national influencer. So we're doing things. We don't necessarily do huge splash announcements about some of the things that we do. But the things that we're doing, we know are delivering great returns, and we're going to continue to be really aggressive in terms of thinking through what might be next.

Our next question comes from Barry Jonas with Truist Securities.

Jay, I guess I wanted to expand on inorganic growth or M&A. Are there sort of jurisdictions you'd like to be in from an omnichannel perspective that maybe M&A would allow you to accomplish? Are there any tack-on verticals that you're exploring at the moment?

Yes, and yes. We've got a lot in the queue that we're looking at right now. New York, obviously, is a really important state for us to have an access solution for, depending on how legislation works out. There's some differences between what the governor has said and what leading lawmakers want to do. And so we're staying close to that. The nice thing about where we find ourselves today, Barry, is that we've got a terrific balance sheet, sitting on almost $2 billion in cash. We have -- we've delivered and we're delivering now in our second state in terms of being a major player in online sports betting. And we have this great footprint in all of these skins, and we still have lots of excess skin. So as we think about how to get access to a state or how we want to think about a partnership and M&A, New York is a great example. We can acquire our way into access. We can partner our way into access, and we can barter our way into access because of our excess skins. So we've got a lot of flexibility in that where we've got a lot of conversations that are warm right now, and we'll be hopefully announcing soon some of the things that we're currently working on with regard to access. And M&A, we're looking at all sorts of adjacencies because you just don't know how this is all going to come together in the out years. There's going to continue to be, we believe, a lot of industry convergence between gaming, sports betting, media and tech, and potentially video gaming, e-sports. There's a lot out there to consider. And Chris Rogers and others on our team are very busy continuing to look at what all the potential options are for us to consider. And it's great having partners like Barstool because they live in Internet every day, and they bring some really good ideas to us that could be really interesting down the road from an M&A standpoint as well.

Great. And then I guess as a follow up, what's your view on vertical integration here as it relates to sports betting or interactive in general?

It's in that list of things that we're considering. Barry, I would tell you that now that we've successfully launched in state 2, and we've now launched the fully integrated Barstool iCasino, I have to say, I could not be happier with our partner the White Hat Gaming and Kambi. It doesn't mean that we won't ever think about being more vertical on the tech stack down the road. It just means that I think there's pros and cons to both. And we feel really good about where the -- I think it's safe to say the most important client they both have in the U.S., we move their needle. And we have their attention. We've got a lot of great resources. The relationship is in a great place. They're extremely responsive, and they've delivered. So we'll see, more to come on that one. I don't feel like we've got a gun to our head to figure that out in the next week or month. We've got time. We'll be thoughtful, and we'll be judicious if we decide to do something because we feel like we've got a lot of great options in front of us.

Our next question comes from Ben Chaiken with Crédit Suisse.

In the sports betting segment, it sounds like Illinois is the next state to go live. How do you think about that versus Virginia or another state in the context of the comments you made earlier, Jay, around the benefits of being there when the gun goes off, so to speak? Is it just the size and opportunity of Illinois, but just any more color you can provide there?

Yes. Well, a couple of things. One, there isn't another state right now that the gun is about to go off. I mean, Virginia has been kind of weak -- there's been operators kind of going live every 5 days or 7 days, and we're cautiously optimistic we'll be in that queue somewhere. They haven't announced all of their licenses up to this point. So for us, it was a pretty easy decision because you have to plan these things out. You can't just wake up one day and say, well, let's do that state tomorrow. You've got to work with the regulators. And every state has different controls and regulations and rules around betting on college versus not, betting on local teams versus not, what sports. And so you have to build these things out. Now Illinois for us is going to be, we think, an amazing state. Right behind Boston, there's no city in the country where Barstool's bigger than in Chicago. And so Big Cat's from there. We've got a great following on the Barstool side. We have 3 casinos in the state. For us, Illinois was a no-brainer. We want to be live before March Madness. We're cautiously optimistic. We'll be able to make that happen. We're just working with the regulators on dates. After that, it's going to be a mad rush to get as many live as possible before football season when college and NFL football kicks back in. You should expect the Indianas and the New Jerseys. And when we say New Jersey, both sports betting and online casino, given that we just did both in Michigan successfully, we'll be ready to do both in New Jersey when we go live there. Colorado, Virginia, West Virginia, Iowa, Tennessee, I think that's probably the lineup there. And we're in a spot where we've got an opportunity depending on what happens and how fast Maryland moves and Louisiana moves, if legislation gets going in Ohio, Massachusetts. We have a lot of flexibility on the second half of the year to continue to swap things in and out. We think the bigger the state population and the bigger the Barstool brand in the state are really big factors for us. And of course, being at the starting gate is probably going to be factor number one. So if we can be at the starting gate, then that's probably going to move up from a prioritization standpoint.

Got you. That's super helpful. And then just one more on the land-based side. I think you mentioned that January had some positive trends. I think you mentioned similar to 1Q '20 in the South segment even stronger. Just as we think about the cadence, presumably, 1Q had a lot of variation, given the development of COVID with March closures, et cetera. So does that common equate to the first half of 1Q or the second half? Or just any more color as you can just try and track it kind of where you guys stand?

This is Todd. I'll take that. So I think what we're seeing if you can extrapolate the sales. And I would even throw in a state like Iowa that's had few restrictions as well. The year-over-year comparisons are actually pretty favorable for us. So even looking at this last weekend where Ohio started to ease restrictions just by moving the curfew back an hour, we saw a tremendous pickup there. So Illinois is now being open and working through the restrictions there. As these states start to ease the restrictions, we're encouraged when we kind of look at the southern region as what we feel every region can look like as we go forward. And again, keep in mind that last year, Q1, the end of Q1 is where we started to see the COVID impact. So we're optimistic about the way Q1 kind of shapes up.

I would just add that Todd and I were talking yesterday for a while about this pent-up demand. And it's real. It's real. And when we're seeing in states that, to Todd's point, loosen some of these curfews and restrictions, you see a bump the next calendar day. People want to get out of the house. I think as the COVID vaccinations continue to roll and treatments prove more and more effective, the weather warms up. Because you remember, most of our portfolio, we're over-indexed, concentrated in the Midwest and Northeast. You get to the March, April, May and if all these things are still moving in the right direction, I think you're going to see some real pent-up demand like we're seeing in the South right now.

Our next question comes from Stephen Grambling with Goldman Sachs.

On the media business, you noted solid revenue growth and a bunch of good stats on the following growing as well. Can you provide a little bit of incremental color on how the revenue mix may be shifting between the big buckets of advertising, merchandise, et cetera?

Make sure I got that question right, Stephen, you're saying with regard to our sports betting results?

Within the JV specifically, I know that you referenced that the media brand keeps growing its presence, and that feels like it might be an underappreciated part of the story. So I'm just curious how the revenue mix on the Barstool media side might be evolving.

Got it. Sorry about that. Yes, I'll try to be thoughtful around what I can say because, remember, we're 36% investors, we don't control or own majority today. And I don't want to speak for Erika Nardini about too much about her business. Of course, what I would say is that 2020 was the best year on record. The growth was unbelievable. There was a little bit of a pocket in that March, April, like every other company in the U.S. and probably the world for that matter was like, what's going to happen. And you saw some pullback on advertising spend, but really from May through the end of the year, every category was very strong. This is something that I actually don't think gets enough attention. I actually appreciate you asking the question, Stephen, because we are going to own the majority, if not all of Barstool at the third anniversary, which is only 2 years away. You look at how there's been some really interesting transactions in the podcast space, sports media. We got a call the other day about a tiny little sports media company and the asking price compared to what we're going to end up paying for potentially all of Barstool makes me feel really good about the value of Barstool. It's interesting too. We talked about this with Dave and Erika and Dan a few times that Barstool Sports, by itself, was probably worth X and had the potential to get to Y sort of if they stayed on a stand-alone basis. And Penn maybe was worth A and had potential to get to B but then you put the 2 companies together and it became exponential in terms of what the platform that each provided for one another and the exposure and access to different customer bases. They now have everybody on Wall Street following them, and we have everybody -- not everybody, but so many in that 21 to 40-year-old age group following us and wearing Penn gear. So there’s so much synergy. The companies were very complementary for one another. I think that value, again, without getting into too much detail, and I'm sure Erika will share whatever she's comfortable sharing at conferences, that value is only going to continue to grow given all of the great things that they've done and how they've proven to be just so agile. I mean, who would have thought that Davey Day Trader would be a thing, let alone a huge thing, and unboxing promotions would have millions of viewers every night and live streams have them playing digital Blackjack that would garner so much attention. But there's -- I say it all the time, you're probably sick of hearing me say that they're marketing geniuses, and we're really thrilled to be partnered with them and thrilled to be the future owners of that brand.

Makes sense. That's helpful. They've essentially become a platform for influencers. As an unrelated follow-up, I think this is John's earlier question about the customer overlap between channels. Can you touch on what you're seeing and expecting in converting sports betting customers to iCasino?

Yes. Happy to. Now this is really early. We're talking 2.5 days early. But we had targets internally. I won't share what those were in terms of what percentage of our Barstool online sports bettors we would be able to convert into Barstool iCasino customers. And we're really close to what our goal was after 2.5 days and those days were Monday, Tuesday, and Wednesday, which makes me feel really good heading into the weekend. We're now over 15% conversion. It's so smooth and easy to find in the app. It's got its own place on the bottom as well as in the menu bar. It's very intuitive. It's one wallet, you get in, play some Blackjack or some roulette maybe at half time of the game. And I think this is where we can do things that are really differentiated around Dave and Big Cat and the other Barstool personalities. So maybe people are staying tuned in throughout the game as to what they're doing betting on sports, but then you've got half-time and what are they doing when they go play Blackjack or tinkering around with new slot machines. And we definitely -- one of the things that we will do. I don't have to share how we're going to do it. What we will do is we're definitely going to be in the business of creating our own gaming content around Barstool and our own games around Barstool because they've got a lot of great ideas, and we know that's something that would be really attractive to their followers.

Our next question comes from Thomas Allen with Morgan Stanley.

So starting off on the brick-and-mortar business. I think you offered up, Todd, to talk more about the January trend. I guess, Ben asked a question earlier a little bit. But if you think about third quarter '20, your EBITDA was up 11% year-over-year. Fourth quarter just now, you're down 9%. Are the trends kind of in between those? Are we seeing growth? And I remember that January, February, '20 were really strong. So can you just put all this into context a little bit more?

Sure. Thanks, Tom. Let me start off by saying January just kind of wrapping up here, we're still going through the process. But we're encouraged right now with January being really in line, carried in large part by the South region again, but being very much in line with prior year. February, as Jay spoke to, Friday and Saturday were the best volumes we've seen from a slot standpoint since Q1 of last year. Even from a table standpoint, it was the second-best Friday and Saturday we've seen. So then the storm wiped out much of that in the Northeast. So I think if we look at where February is trending now and we can stay close and then there's potential upside for March, so to be safe, I would say it's somewhere between, but there is upside potential there.

I would just add that Todd and I were talking yesterday for a while about this pent-up demand. And it's real. It's real. When we're seeing in states that, to Todd's point, loosen some of these curfews and restrictions, you see a bump the next calendar day. People want to get out of the house. I think as the COVID vaccinations continue to roll and treatments prove more and more effective, the weather warms up. Because you remember, most of our portfolio, we're over-indexed, concentrated in the Midwest and Northeast. You get to the March, April, May and if all these things are still moving in the right direction, I think you're going to see some real pent-up demand like we're seeing in the South right now.

Our next question comes from Stephen Grambling with Goldman Sachs.

On the media business, you noted solid revenue growth and a bunch of good stats on the following growing as well. Can you provide a little bit of incremental color on how the revenue mix may be shifting between the big buckets of advertising, merchandise, et cetera?

Make sure I got that question right, Stephen, you're saying with regard to our sports betting results?

Within the JV specifically, I know that you referenced that the media brand keeps growing its presence, and that feels like it might be an underappreciated part of the story. So I'm just curious how the revenue mix on the Barstool media side might be evolving.

Got it. Sorry about that. Yes, I'll try to be thoughtful around what I can say because, remember, we're 36% investors, we don't control or own majority today. And I don't want to speak for Erika Nardini about too much about her business. Of course, what I would say is that 2020 was the best year on record. The growth was unbelievable. There was a little bit of a pocket in that March, April, like every other company in the U.S. and probably the world for that matter was like, what's going to happen. And you saw some pullback on advertising spend, but really from May through the end of the year, every category was very strong. This is something that I actually don't think gets enough attention. I actually appreciate you asking the question, Stephen, because we are going to own the majority, if not all of Barstool at the third anniversary, which is only two years away. You look at how there's been some really interesting transactions in the podcast space, sports media. We got a call the other day about a tiny little sports media company and the asking price compared to what we're going to end up paying for potentially all of Barstool makes me feel really good about the value of Barstool. It's interesting too. We talked about this with Dave and Erika and Dan a few times that Barstool Sports, by itself, was probably worth X and had the potential to get to Y sort of if they stayed on a stand-alone basis. And Penn maybe was worth A and had potential to get to B but then you put the two companies together and it became exponential in terms of what the platform that each provided for one another and the exposure and access to different customer bases. They now have everybody on Wall Street following them, and we have everybody -- not everybody, but so many in that 21 to 40-year-old age group following us and wearing Penn gear. So there’s so much synergy. The companies were very complementary for one another. I think that value, again, without getting into too much detail, and I'm sure Erika will share whatever she's comfortable sharing at conferences, that value is only going to continue to grow given all of the great things that they've done and how they've proven to be just so agile. I mean, who would have thought that Davey Day Trader would be a thing, let alone a huge thing, and unboxing promotions would have millions of viewers every night and live streams have them playing digital Blackjack that would garner so much attention. But there's -- I say it all the time, you're probably sick of hearing me say that they're marketing geniuses, and we're really thrilled to be partnered with them and thrilled to be the future owners of that brand.

Makes sense. That's helpful. They've essentially become a platform for influencers. As an unrelated follow-up, I think this is John's earlier question about the customer overlap between channels. Can you touch on what you're seeing and expecting in converting sports betting customers to iCasino?

Yes. Happy to. Now this is really early. We're talking 2.5 days early. But we had targets internally. I won't share what those were in terms of what percentage of our Barstool online sports bettors we would be able to convert into Barstool iCasino customers. And we're really close to what our goal was after 2.5 days and those days were Monday, Tuesday, and Wednesday, which makes me feel really good heading into the weekend. We're now over 15% conversion. It's so smooth and easy to find in the app. It's got its own place on the bottom as well as in the menu bar. It's very intuitive. It's one wallet, you get in, play some Blackjack or some roulette maybe at half time of the game. I think this is where we can do things that are really differentiated around Dave and Big Cat and the other Barstool personalities. So maybe people are staying tuned in throughout the game as to what they're doing betting on sports, but then you've got half-time and what are they doing when they go play Blackjack or tinkering around with new slot machines. One of the things that we will do is create our own gaming content around Barstool and our own games around Barstool because they've got a lot of great ideas, and we know that's something that would be really attractive to their followers.

Our next question comes from Thomas Allen with Morgan Stanley.

So starting off on the brick-and-mortar business. I think you offered up, Todd, to talk more about the January trend. I guess, Ben asked a question earlier a little bit. But if you think about third quarter '20, your EBITDA was up 11% year-over-year. Fourth quarter just now, you're down 9%. Are the trends kind of in between those? Are we seeing growth? And I remember that January and February '20 were really strong. So can you just put all this into context a little bit more?

Sure. Thanks, Tom. Let me start off by saying January just kind of wrapping up here, we're still going through the process. But we're encouraged right now with January being really in line, carried in large part by the South region again, but being very much in line with prior year. February, as Jay spoke to, Friday and Saturday were the best volumes we've seen from a slot standpoint since Q1 of last year. And even from a table standpoint, it was the second-best Friday and Saturday we've seen. The storm wiped out much of that in the Northeast. So I think if we look at where February is trending now and we can stay close and then there's potential upside for March, so to be safe, I would say it's somewhere between, but there is upside potential.

I would just add that Todd and I were talking yesterday for a while about this pent-up demand. And it's real. It's real. When we're seeing in states that, to Todd's point, loosen some of these curfews and restrictions, you see a bump the next calendar day. People want to get out of the house. I think as the COVID vaccinations continue to roll and treatments prove more and more effective, the weather warms up. Because, you remember, most of our portfolio, we're over-indexed, concentrated in the Midwest and Northeast. You get to March, April, May and if all these things are still moving in the right direction, I think you're going to see some real pent-up demand and we are seeing that in the South right now.

Mr. Snowden, I will now turn the call back to you. Please continue with your presentation or closing remarks.

Great. Yes, no -- nothing else to share. I really appreciate everybody dialing in this morning. Really solid quarter, more importantly, off to a great start this year on our core business. Happy with the launch in Michigan and lots of exciting updates to share with all of you on our future calls for the rest of this year and beyond. So thank you very much. Talk to you soon.

That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines. Have a great day, everyone.