Thank you, operator, and good afternoon, everyone. Thank you for joining us today for Red Rock Resorts' first quarter 2023 earnings conference call. Joining me on the call today are Frank and Lorenzo Fertitta, Scott Kreeger and our executive management team. I'd like to remind everyone that our call today will include forward-looking statements under the Safe Harbor provisions of the United States federal securities laws. Developments and results may differ from those projected. During this call, we will also discuss non-GAAP financial measures. For definitions and complete reconciliation of these figures to GAAP, please refer to the financial tables in our earnings press release, Form 8-K and investor deck, which were filed this afternoon prior to the call. Also, please note that this call is being recorded. On a consolidated basis, the first quarter net revenue was $433.9 million, up $32 million, or 8% from the prior year first quarter. Adjusted EBITDA was $194.2 million, up $15.4 million or 8.6% year-over-year. Our adjusted EBITDA margin was 44.8% for the quarter, an increase of 28 basis points year-over-year. This represents the best first quarter adjusted EBITDA and adjusted EBITDA margin results in the company's history. With respect to our Las Vegas operations, the first quarter net revenue was $430 million, up $30.3 million or 7.6% from the prior year's first quarter. Adjusted EBITDA was $214.1 million, up $15.9 million or 8% year-over-year. Our adjusted EBITDA margin was 49.8%, an increase of 19 basis points year-over-year. This represents the second best quarter for Las Vegas operations in the company's history in terms of both adjusted EBITDA and adjusted EBITDA margin, and marks the eleventh consecutive quarter that the company delivered adjusted EBITDA margins in excess of 45%. In the quarter, we converted 78% of our adjusted EBITDA to operating free cash flow generating $152 million, or $1.46 per share. This significant level of free cash flow continuously reinvested in our long-term growth strategy or return to our stakeholders via debt paid down dividends or share repurchases. Throughout the quarter, we remained operationally disciplined and focused on our core local guests, as well as continued to grow our regional and national segments. When comparing our results to last year's first quarter, we continue to see upside from strong visitation in our regional and national segments. This strength coupled with strong spending per visit across our entire portfolio allowed us to enjoy record first quarter revenue and adjusted EBITDA results across our entire gaming segment. Turning to the non-gaming segments, both hotel and food and beverage delivered significant year-over-year and record profitability in the first quarter. Hotel revenue was $43.9 million, up $7.2 million or 19.5% year-over-year, driven by higher occupancy and ADR across our hotel portfolio. Food and beverage revenue was $78.1 million, up $12.4 million or 18.9% year-over-year, driven by higher average check across our food and beverage outlets and the strength of our catering business. Our catering revenue has surpassed 2019 levels and continues to grow as this quarter represents the seventh consecutive quarter of double-digit year-over-year growth in this business segment. With regard to our group sales business, we continue to see positive momentum driven by growth in both room nights and ADR as our pipeline continues to grow into 2023. As we begin the second quarter, our business across both our gaming and non-gaming segments remain stable. On the expense side, we remain operationally disciplined and continue to look for ways to become the most efficient while providing best-in-class wages and benefits to our team members and delivering best-in-class customer service to our guests. Despite macroeconomic headwinds, which include inflation and increased interest rates, our focus on our core operations has enabled us to generate record adjusted EBITDA, maintain adjusted EBITDA margins, and return over $1.2 billion in capital or nearly $12 per share to our shareholders since we reopened in June of 2020. While we remain vigilant regarding the macroeconomic picture, we are committed to disciplined investment in our core strategy, which includes expanding our footprint in Las Vegas and offering new amenities to our guests and our existing locations. Building upon the success of the successful openings of a high limit table and slot rooms as well as Lotus of Siam at our Red Rock resort property last year, we welcomed Naxos Taverna Kallisto Oyster Bar and Rouge Room during the first quarter. These new amenities complement the existing offerings at Red Rock and have been well received by our guests. In addition, we successfully opened Wildfire Fremont located on the Boulder Highway on February 10; a 21,000 square foot casino featuring over 200 slot machines, sports books, and two restaurants at a capital investment of $24 million. Now let's cover a few balance sheet and capital items. The company's cash and cash equivalents at the end of the first quarter was $107.7 million, and the total principal amount of debt outstanding was $3.08 billion, resulting in a net debt number of $2.98 billion. As of the end of the first quarter, the company's net debt-to-EBITDA and interest coverage ratios were 3.9 times and 5.6 times respectively. Our leverage is expected to pick up as we complete the construction of our Durango project. Upon the completion of Durango, we expect to deliver it toward our long-term net leverage target of 3.3 times. Capital spent in the first quarter was $175.5 million, which includes approximately $159.2 million in investment capital inclusive of Durango, as well as $16.3 million in maintenance capital. For the full year 2023, we expect to spend between $70 million and $90 million in maintenance capital, and a total of $600 million to $650 million in growth capital inclusive of Durango. Now, let's provide an update on our development pipeline. Starting with our Durango development, as we've mentioned before, we're extremely excited about this project, which is situated on a 50-acre site ideally located off the 215 Expressway and Durango Drive in the southwest Las Vegas Valley. This project is located within the fastest growing area in the Las Vegas Valley with a very favorable demographic profile and no unrestricted gaming competitors within a five-mile radius. This quarter, we completed the full enclosure of the low rise structure and are finishing the enclosure of the hotel tower. Our tower service elevators are now fully operational and we expect to have a central plan online in the next couple of weeks. The project is on schedule with an anticipated opening in the fourth quarter of 2023. We now expect to spend approximately $780 million on the project, which includes all design costs, construction hard costs, soft costs, pre-opening expenses, and any financing costs associated with the project. Most of the increase in this investment is attributed to our decision to expand the casino area and add an additional 360 gaming positions to the casino floor. We believe that a larger casino footprint will better align the product offering with the anticipated growth and favorable demographics in the area surrounding Durango. Additionally, there have been some smaller increases to our construction, labor and procurement costs, as we work to ensure the project opens later this year. Despite the increase in investment, the company expects the return profile for Durango to be consistent with our prior Greenfield developments. Now turning to North Fork, as we noted last quarter, after favorably resolving all its other litigation, the tribe has a single remaining case in the California courts. We do not believe that this case will interfere with the right or the ability of North Fork to conduct gaming on its federal trust land and we continue to work with the tribe to progress our efforts with respect to this project, including working toward approval of the management agreement, continuing our work on the development of design and having preliminary talks with respective lending partners. We will continue to provide updates on our quarterly earnings calls. On April 20, the Oakland A's announced that they have entered into a purchase and sale agreement to buy 48.6 acres of land on our Viva site. In conjunction with the sale, the Oakland A's were granted an option to acquire an additional eight acres of land on the site. Due to confidentiality the purchase price in this transaction has not been disclosed but the anticipated closing of the sale is anticipated to occur in the fourth quarter later this year. As a reminder, the entire Viva site consists of 96 acres. So if the A's transaction closes, and they exercise their eight-acre option, we still retain 39.3 acres for future monetization as we continue to execute on our strategy of repositioning our land portfolio for future growth. Last year, on May 4, the company's Board of Directors declared a cash dividend of $0.25 per class A common share payable on June 30 to Class A shareholders of record as of June 15. With our current best-in-class assets and locations, coupled with our development pipeline of seven development sites located in the most desirable locations in the Las Vegas Valley, we have an unparalleled growth story that will allow us to double the size of our portfolio and capitalize on the very favorable long-term demographic trends and high barriers to entry that characterize the Las Vegas locals market. Despite a challenging macroenvironment, our disciplined approach to running our business resulted in record-high EBITDA and EBITDA margin for the quarter. While we remain vigilant regarding the overall economic environment, we are confident in the resilience of our business model, as well as our management team's ability to execute our long-term growth strategy and take a balanced approach to returning capital to our shareholders and improving upon our already strong balance sheet. We'd also like to recognize and extend our thanks to all of our team members for their hard work. Our success starts with them and they continue to be the primary reasons why our guests return time after time. We are also proud to announce today that our employees have voted us the top casino employer in the Las Vegas Valley for the third year in a row. We're also proud to share that Forbes recently selected our Red Rock Casino Resort and Spa as a top overall Casino Resort Hotel in Las Vegas, which we consider a tremendous recognition of our efforts and those of our team members. And finally, we'd like to thank our guests for their loyal support in each of the last six decades.

The first question today comes from Joe Greff with JP Morgan. Please go ahead.

Good afternoon, everybody. Very strong results here and, as you mentioned, particularly in the non-gaming side of things. How broad-based was this non-gaming revenue growth? I guess where I'm going with this is how even or uneven or concentrated is this non-gaming growth at maybe some of your higher-end properties like Red Rock and Green Valley Ranch versus maybe some of what I would call sort of your core properties?

Hi, this is Scott. Thanks for the question. Really, it's across the board. So when you look at the company as a whole, whether you're looking at food and beverage revenue, catering revenue, and the dynamics of average check and covers in food and beverage, it's across the board. So we saw about a 20% growth in food and beverage and about a 78% growth in catering revenue and we saw our profit in food and beverage go up 44%, so really strong numbers in the food and beverage side. And then on the hotel side, equally strong numbers, hotel revenue was up about 20%, ADR was about 18%, and RevPAR overall was up about 34%, so really strong numbers. And then if you look at bowling, we were up by 25% and spa and so on about the same percentage at 24.6%. So we're really happy with the blend of results there. As you drop into properties, you are going to see some upside benefit at Red Rock because of the capital investment that we've done there. So with the new inclusions of restaurants and lounges, we are seeing upside revenue increases there, but it really is across the board when you look at a property-by-property basis.

Great, thank you very much. And then, for anybody who wants to take this next question, how are you thinking about the timing of the next development beyond Durango, phase one, say Inspirada and Henderson? How much time or what do you want to see to give Durango time to ramp or breathe before investing elsewhere? How does the phase two at Durango fit in the priority list? And then finally, I guess what we would consider increased land asset monetization impact the timing of your next development?

Hi, Joe. This is Lorenzo. I'll take that. I think our thought process is similar to what we said in the past. I mean, our focus right now is getting Durango open. We will open that in the fourth quarter. We would want to make sure that Durango is as stable and marching toward the expected return on investment, obviously that we talked about and that we've been able to achieve historically. With that said, we have been working pretty diligently on plans and entitlements for the balance of the land that we own, the land bank for future development. Also, we've been working on a potential phase two for Durango, working on what that programming could look like, what it would be and trying to work out all the details on that. I will tell you that historically, once you have a property up and open and cash flowing and doing very well, the spend to go to a phase two, or an incremental expansion tends to be very high return on investment and very efficient. So while we haven't committed to anything yet, I mean, it's exactly what we had said before. I mean, we just want to get the Durango open, we expect it to be successful as we open it, and we want to get it stable and then we'll be in a position because of the work that we've done to be able to have multiple options, whether we pull the trigger on phase two, whether we break ground on one of the other properties, we'll make that decision, but we're in a really good spot for that from that standpoint.

Great. Thanks, guys.

The next question comes from Carlo Santarelli with Deutsche Bank. Please go ahead.

Hey, everyone, thanks. Steve, could you share your thoughts on the Las Vegas expenses?

You're cutting out a little bit, Carl.

I'm sorry, Steve, do you hear me better now?

Yes, I do.

I was saying when you look at the Las Vegas segment, flow through was kind of in that 50% to 55% range. Obviously, the growth in FD and the growth in some of your other revenues and hotel is coming in stronger than the casino revenue growth right now. But as we move forward, how do you guys think about what normalized flow through can look like in the local segment?

I mean, I think this is going back to the days, so again, from a margin perspective, we feel very comfortable with the overall margins; again, we delivered consecutive quarters of margin over 45%. So when we think of what normalized margins are, that were here, and we think we can sustain these margins through good times and bad. When you're asking about flow through, I mean, we think flow through, and I think we've always historically used a target of 50% to 70% flow through, there's going to be some quarters where timing may prevent that from happening but we're sticking with that target.

Understood. I have a follow-up question. As you mentioned earlier, Frank and Lorenzo, you've often discussed achieving a return in the high teens on investment similar to your historical performance at greenfield developments. Does this estimate take into account any effects on the existing portfolio that could arise when you add it? Are you considering this in a comprehensive way regarding how this project will influence overall EBITDA in relation to the spending?

Yeah, this is Lorenzo. We do. Now when we talk about the returns, we're talking about stabilized returns, which we expect to take roughly about three years to hit those targets. But that would include even if there was some degradation early on for opening a new property that there would be backfill at existing properties that so when we talked about the returns, it is holistic, with the new supply in the market affecting everything. And that's what we've seen historically, as we've opened new casinos. The overall market tends to backfill and grow overall, as we add new products, so that would be our expectation.

Great, thank you guys.

Next question comes from Shaun Kelley with Bank of America. Please go ahead.

Hi, good afternoon, everyone. Thank you for taking my questions. I wanted to follow up on that last point. Lorenzo, you mentioned that it might take about three years to achieve stabilized returns. If I understood correctly, could you elaborate a bit on the expected opening timeline? It has been several years since we've seen a major opening in the local market, and I'm curious about the programming needed at the start. Is there an anticipated marketing investment period? Generally speaking, I believe awareness is already quite high in this market. Could you walk us through the plan and provide any insights on what the initial openings might look like compared to that stabilized time frame?

Historically, in the local market, when we open new properties, they tend to be profitable right away, and the focus shifts to managing expenses. Typically, when we launch in Durango or other locations, we may start with more staff than necessary and experience significant business volume. Initially, our top priority will be ensuring excellent customer service for all guests, whether on the gaming floor, at table games, or within our restaurants and hotels. It’s about fine-tuning our service and then optimizing our operations to enhance profit margins and continue growing revenue. These businesses are dynamic, and there is constant influx of new residents. Based on our marketing strategies, we expect high awareness of Durango as a new destination when we open, which should lead to busy operations immediately. However, it may take some time for us to streamline our processes efficiently; this could take anywhere from 18 months to three years. Historically, it typically takes about two to three years for these properties to stabilize as we view them.

Very helpful, and then is my follow up, and you kind of alluded to like a little bit of the staffing side of things. Just kind of wanted to get the thoughts on the upcoming union negotiations that are going on, I think across Vegas. What impact if any, does that have on Red Rock? And then more importantly, I think, kind of when you think about just matching and prevailing wages across the valley, how do you see kind of the wage or expense growth trending, as you kind of move throughout this year and maybe the next couple of years once that contract is in place?

Yeah, this is Scott. So certainly, that contract gets negotiated that will set a new bar and have some effect in the valley across the valley. But how we look at labor today and into the future is, we've set a couple of orders now that, one, we've been able to be a best-in-class selection for employees based on our comps and benefits. And we've priced in to our margins very current wage and hour rate. We think we're set up well for Durango. We're out in the market now, testing those numbers and we think that those numbers are solid on an hourly wage basis. And so we think that that labor pressure is starting to subside a bit but we do want to be cautious that in the last part of the year, there are several major projects opening in Las Vegas that may cause a bit of inflation over, say, a six-month period as we open up Durango. So you have the MSG sphere opening up and the Fountain Blue opening up, so there will be some competition for labor around those openings.

Perfect, thank you very much.

The next question comes from Jordan Bender with JMP Securities. Please go ahead.

Great, thanks for taking my question. If I caught it correctly, I believe you guys said you'll keep some of the acreage tied to the parcel you're selling to the A's. Does it make sense or could you or would you potentially build a casino on that parcel kind of next to the stadium?

I think what we've really talked about the last few quarters is, getting a better layout for our future growth pipeline. And you've seen that we've acquired a few sites where all the growth is off the beltway. In the Las Vegas Valley, we think we're well positioned. And I think we're looking really to monetize the Viva parcel and we think that the A's was a really good thing to actually increase the value of the remaining property. So we're pretty bullish that we're going to be able to monetize the Viva site, basically, and we wind up with all these new sites out in the suburbs that we've acquired over the last 12 months.

Great. And then just for my follow up. It looks like corporate expense kind of ticked up in the quarter. Was there anything kind of one-time in nature? Is that kind of the right way to think about that moving forward?

You are within that range, there's probably going to be a half a million. That's more maybe one-time; it was basically a bonus related to 2022 and the great year we had so.

Great, thanks. Best quarter.

The next question comes from Steve Wieczynski with Stifel. Please go ahead.

Hey, everyone. Good afternoon. On the non-gaming side of the business, specifically regarding the hotel segment, it appears that you have been able to increase rates significantly. I believe Scott mentioned that ADRs rose by 18% in the first quarter. Can you help us understand the trend in forward room bookings as you continue to implement these price increases? Essentially, I'm trying to gauge whether you're experiencing any pushback as you raise those rates.

Hi, Steve. This is Scott. I think I can help you here. So let's take a look at forward bookings, same time last year compared to now and we'll also kind of look at 2019. Because we do get asked frequently, are we back to 2019 levels. So when you look at the pace for sales room nights right now, same time last year, we're up about 41%. So very encouraging numbers there, when you look at total room nights, and the revenue associated with that were up 53% and correspondingly catering on the books, same time last year is up almost 70%. So as we look into the future, we're very encouraged about the booking pace. You mentioned ADR, when you look at overall ADR in comparison to 2019, we're about 21% above 2019 ADR numbers, and we have surpassed 2019 numbers as it relates to catering in group going into the rest of this year.

So maybe piggyback on what Scott said, I think not only are we seeing a robust pipeline, but the mix is shifting. So we're seeing predominantly a corporate group enter the mix and in our pipeline and that's a great thing, because you get multiple revenue streams from them, not only rooms but also food and beverage.

Yeah, that’s one other thing. Relative to the mix, we're actually seeing quite an increase between now and 2019 in our casino mix; we went from 24% to 31%. And so really what that says is a lot of the growth we're seeing is in ADR.

Thanks for that, guys. And to add on to that, as you start to see more on the corporate side, I would assume that if corporate continues to roll in, there'll be more opportunity to push price, especially midweek? Is that kind of the right way to think about it?

That's the right way to think about it. That's what we're seeing in the trends.

The next question comes from Barry Jonas with Truist Securities. Please go ahead.

Great. Last year, you guys talked about seeing some impact at the low end of the database. I know, you also said it's less of a focus. But can you maybe just talk about how that's playing out right now?

Yes, this is Scott. So I think what we've said in the past is, we focus on our core customer, that being national, regional VIP core customers. When we look at the performance for the quarter, we see strong growth across all of those areas. When we look at overall of carded, we were up about 2.6%, so we're pretty happy with that. And so when we talk specifically about the lowest end of our database, I think we've mentioned before, a lot of our core strategy is focused on the mid to high out of town customer, and that we've shifted away from that low profit, low contribution customer. So you're not seeing anything more than we've reported in the past in relation to that database performance.

Great, that's helpful. And just for a follow up, I know there are limits to what you can say. But are there any notable conditions for the A's land sale to close and with that are gaming entitlements included with the A's parcel as well as would it remain with the second parcel that you want to monetize?

Hey, Barry, unfortunately, we're under confidentiality, so we can't really answer any of these questions at this time.

Understood. Thanks so much, guys.

Thank you.

Next question comes from Dan Politzer with Wells Fargo. Please go ahead.

Hey, good afternoon, everyone. I wanted to talk about the food and beverage side of the business just as it relates to more your kind of high level strategy there. It seems like you've been moving more towards third party, higher-end products. Can you help us, maybe better understand the rationale for doing this is the mid-to-high end customer, you just kind of reference in more out of town? And how should we think about the impact of free cash flow and EBITDA margins?

Yeah, this is Scott, I think I'll start it and maybe Lorenzo can add some color. I think to say that we're solely focused on that might be a misrepresentation or better or a misunderstanding. I think in certain properties we are looking at more third-party and more higher-end outlets, but we're really looking across our food and beverage platform, based on the specific demographic of the customer at that property. So while you do see us doing a lot of stuff with notable food and beverage operators at Red Rock, what's less talked about are the properties like Boulder and Power Station and Sunset Station, where we're doing equally as dynamic things, but at a different level of average check or food type.

We have observed a very positive impact at Red Rock from the reconfiguration we implemented by replacing the buffet with a high limit table game area, a Greek restaurant, and Lotus of Siam. The transformation at that end of the building is remarkable. With the increase in customer flow, our table games have seen a significant boost, and our peak occupancy for table games has improved greatly, which has also benefited our high-end slots. Overall, the return on investment has surpassed our expectations. We are currently working on a similar strategy at Green Valley Ranch, where the buffet is under construction to introduce new food and beverage options, along with a high limit table game area and a new high limit slot area. This approach is proving very effective for us and is positively impacting our margins as well.

Got it. Thanks. And then as you think about capital return, Stephen, I know you mentioned you should return back to that three times leverage falling during those opening. I mean, as you think about getting back to returning capital to shareholders via repurchases or any change in the dividend policy, is this something you need to get to or could we see it kind of along the way as Durango ramps?

I think we have temporarily paused share repurchases while we focus on getting Durango operational. Once Durango is up and running, we anticipate a quick decrease in our debt levels, as local casinos usually generate positive cash flow right from the start. We will then adopt a balanced approach to returning capital to shareholders. As our balance sheet improves with the rollout of Durango, the Board will begin to consider both dividends and share repurchases.

Understood, thanks for the color.

The next question comes from Chad Beynon with Macquarie. Please go ahead.

Afternoon, thanks for taking my question. I wanted to ask about your retention levels, free play in promos if that has been stable, or with the influx of maybe some new people moving into the area, if you've had to step up with any of that, just trying to figure out kind of where that's headed next. Thanks.

It's been extremely stable. I mean, ever since we reopened, post-COVID in the third quarter of 2020, as Steve said, we've had 11 quarters with margins above 45%. I think this quarter was probably the second or third best margin that we've had in the company's history. So we see absolutely no changes there. I mean, we're focused on the fact that we have the best locations where all the population is growing. We're focused on customer service, customer recognition, and the things that really matter to people. We're not seeing any changes in the promotional environment.

Great. Thank you. And then a follow up. You talked about a stable customer, particularly at the high end. Are you still seeing nice growth in I guess your neighborhood properties? I guess that would probably be more of a tail on that low end or was the growth fairly balanced with the different levels of properties that you offer in the valley? Thank you.

Yeah, this is Scott. We would characterize it as fairly balanced and stable across the platform.

The next question comes from David Katz with Jefferies. Please go ahead.

Hi, afternoon, everyone. Thanks for taking my question. I'll date myself a bit, and maybe a few of us, when you look at the economic makeup of the valley, and how that relates to your portfolio these days. If you could talk a bit about what kinds of economic data and other kinds of information you're looking at, and how that makeup of the valley today differs from where it was 10 or 12 years ago, and how you're different your strategies in conjunction with that?

It starts with the migration of the population from primarily California is the number one market that are people moving to Las Vegas, I think you also see the number one migration coming from California for business relocation, as well. And it's really, I think, much different than it was say back in the ’80s. ’90s and 2000s, where most people moving to Las Vegas, were either looking for a construction job or a dealer's job or cocktail waitress, bartender. And now it's not that you still don't have people looking for those kinds of jobs here but you have a totally different mix of people that are moving here to run their business from here to retire here. And you have people that are not hourly employees; they're bringing their wealth with them to Las Vegas and I think it's a completely different dynamic than what we've seen in the past.

And I think to add to what Frank is saying, when you look at the wealth of these customers, and where they're moving into the valley, this is part of our core strategy of development and growth, that we have locations in all of these high network, high growth areas slowing down and we don't see that slowing down anytime soon.

I mean, you can talk, Steve, a little bit about these recent land purchases that we have in the balance of the portfolio are all within the fastest growing communities in Las Vegas.

Yeah, David, even if you look past even last quarter, from a housing perspective, when you take a look at the fastest growing master plan communities in the Las Vegas Valley, they're all via property; Summerlin, Cadence, Sky Hills, Skye Canyon, and Inspirada. Those names should be familiar because we all land named after most of them. Yes, I think that bodes well for Frank in the rental strategy.

Understood, and if I can follow that up. This is also the odd circumstance where it feels as though we've been waiting around for quite some time for a recession to show up. How do you go about keeping your fingers on the pulse of that, and I know many of the companies we're talking to this earnings season aren't seeing anything yet but are cognizant of its potential.

This is Scott, I think as far as reading the tea leaves, that's a difficult thing to do. But understanding the macroeconomic pressures, I think our management teams at the properties are the best in the business at keeping a pulse on the daily efficiency of the property. So whether you're talking about labor control, cost of goods sold control, any kind of operating expense pressures, I think it's seen in our margins that our operating teams know how to control these macro-pressures and come out with great results. So we've shown consistently that we know how to manage those things. Steve, you may want to talk about some of the energy costs and other things that are less under our control.

I believe there are two challenging factors to manage. One is beyond our control, while the other reflects our identity, which you can see in the rise of SG&A expenses. As Scott pointed out, utility costs have increased by nearly $1.5 million, close to 30%. We are addressing this through various energy initiatives, and the team has done an excellent job navigating this issue. The other significant contributor to SG&A expenses is repairs and maintenance, which connects to our core philosophy and distinguishes us from competitors. It's not just about location, location, location; it's also about the quality of our assets, which keeps our guests returning. You will notice this consistency throughout our financial year.

While we can't read the tea leaves on the macroeconomy, we can tell you that we really like our position based on what we see happening in the Las Vegas Valley. Come on over the next one to five years, with professional sports teams relocating here with the Sphere opening up, with Formula One coming here, with the Super Bowl coming here. Las Vegas has a lot of things that are here that can buffer what else might be little things that happened in the macroeconomy, as well as the population growth and the limits on supply in our market.

Understood. Appreciate the answers and thanks for including me.

The next question comes from John DeCree with CBRE. Please go ahead.

Good afternoon, everyone. Thank you for taking my questions. We have covered a lot of topics, but I would like to revisit two of them from a different perspective. One is wage inflation. We discussed cost pressures earlier in the call, but considering wage inflation, I remember that a couple of quarters ago or maybe a year ago, we talked about how important wage growth is for your customers. As we consider the upcoming wage inflation related to union contracts and other factors, how do you assess the pros and cons? Is it overall beneficial as the population earns more, or does that increase in earnings outweigh the costs? I’m interested to know your thoughts on this.

Hi, John. This is Steve. I believe there are more employees than employers. As wages increase throughout the valley, whether due to union contracts or new businesses launching, having more money in the system is advantageous for our property because they are uniquely situated in the valley, and the employees on the strip are generally our customers.

Fair enough. Thanks, Steven. Maybe it's a specific question. You've already mentioned teams relocating with A's potentially coming. If you look at maybe the Knights, if you seam direct benefit on game nights, I mean, obviously it draws population and feeds into the broader economic story, but was there a closer more tangible benefit around those sporting events that you would expect or would compare if the A's do come?

Yeah, this is Scott. We see across the valley that people come out for the Knights games and so you can see that in our casinos, you can see it in small pubs and taverns. And we also have a strategic relationship with the Golden Knights that we benefit from within our marketing division. So we are big fans of organized sports in Las Vegas, we're big fans of both the football team, the hockey team and eventually the baseball team as well.

It is great for tourism and creating demand for the hotel rooms in the city here.

Perfect. Thanks so much for all the color guys. Congratulations on another great quarter.

Thanks, John.

This concludes our question-and-answer session. I would like to turn the conference back over to Steve Cootey for any closing remarks.

Thank you everyone for joining the call and we look forward to talking again in 90 days. Take care.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.