Churchill Downs (CHDN) 23 Feb 232022 Q4 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Churchill Downs Incorporated 2022 Fourth Quarter and Year-End Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct the question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference. Mr. Treasury Relations. President, Vice Zangari, and Investor Nick

call Thank fourth by this conference quarter call, Good quarter to morning, other G, required and open release statistical period call. at XXXX located in and results The as section. to afternoon. our and at welcome Investors A the will and available and we released the year-end prepared you, your website fourth section company's questions. Regulation the well in the financial the company's be announcing Andrew. After including this the remarks, for conference were results about information year-end yesterday presented churchilldownsincorporated.com business company's as website's XXXX earnings information News, is of of copy titled

I could actual Before materially. may make factors we XX-K. like differ a number and our the report the Form should we statements you and recent of These involve conjunction to today in the of that filings release earnings statements statements considered cause started, risks would results risk the most that get be cautionary to some that include statements. forward-looking remind in the with SEC, in our on with specifically forward-looking included All uncertainties statements

that these as events. a statements on statements assumptions new undertake update to or as we future based forward-looking make are we result Any obligation of today, no and information of

turn Officer, XX-K Chief over present Bill on both The today's to call website release. will are our and earnings we GAAP in Form Mr. non-GAAP to Executive now churchilldownsincorporated.com. A And our release call, this Carstanjen. included of and available press I'll at financial is the During GAAP non-GAAP measures. measures reconciliation press

will Officer; Bill morning, everyone. Financial and we take our President walk then through Dall, several Brad including on Counsel. Operating Mudd, With high-level management finishes, several Blackwell, provide will Thanks, an update team, our General questions. strategic capital Nick. our thoughts our Officer; will some topics, and me Chief Marcia your and our on of Chief are she share results Marcia and I our members today After Good strategy.

of for position XXXX EBITDA We Over $X.X revenue adjusted in we of key and objectives company delivered the course XXXX, billion strategic accomplished and and growth record operational million. beyond. and of the net numerous over $XXX record

held for have XXXX first as records Derby but important will company's very successful setting Kentucky the completed material few I transaction, We virtually a acquisition expectations for We the high in largest touch metric. a well, We highlights PXE regarding our on very XXXX. every history.

HRM in Virginia, of purchase We our in We completed accelerate to expanded and of Chasers strategic Western Calder, agreement land Through at industry. Hampshire. and Hampshire still three growth. and strongest the all venue we Park, an new two acquisitions states: future to business Systems. process entertainment Turfway Ellis our Louisiana. in sheets our Northern HRM we into significant We New Kentucky We Exacta completed We in the several strategic opened signed the investments excess Park in the organic Kentucky. these one of new other balance maintain have initiatives, sale New

growth productive on had XXXX, now executing XXXX, our objectives focus beyond. on but a and In we is our XXXX summary, for

last call. earnings discuss our a since update strategic Let's

XXXth Churchill we Racetrack Downs the First, preparation Derby. progress made significant project Kentucky upcoming in have for on our

located almost of the first X,XXX on The permanent the turn experience structure Racetrack. iconic seats turn more size soccer first complete. is of with the stadium Our typical our than is

infrastructure. forever venue, The structures of this a the backup had changes it. portion and series time scope this temporary see of our of first of by been is complex you stunning, historically house it which the dominated personality And

Derby year's experience Ticket early strong, out. will guests May. this but it in time at sold not sales the is Our it yet been for very have first

We will be. expect it

This will project the innovative Paddock experiences also of the progress who our a is a same on new every significant the transformative single decades venue and gates. and create We at for guest significant Racetrack variety guest through time, while Triple made and views ambience front historic have project. improving the Down's most enters for [ph] the

of transformation the in remain a is core the XXXX. to goal will strategic on This May world. this in effort company Derby and year, We of always course invest profitability that the run be will introduce on the it surpass for special the as and any it is for the grow event that ensure area. Kentucky May scale some despite to Our The of to Kentucky a the XXXth level Derby will and anywhere facility that complete epitomizes initiative our we construction still Granger will this project be of everyone XXXth Paddock on underway Derby. and X is

plan. have good We a

negative materially any year's about Derby. concerned to this aren't impact We

tickets to strong. bought encourage haven't so. If extremely your do is this yet demand for The we you you year,

Second, venues since Racetrack acquiring closed Virginia. PXE and our in Downs November acquisition X, on its we last earnings sixth the Colonial call, operating HRM

Del Resort York Casino Sioux and We in in Lago Casino and City, Iowa. New and Hotel acquired Hard also Rock

HRM in additional The to the in up properties Virginia we and two three pursue acquisition Emporia Dumfries also construction includes venues HRM can state. under and

full relationship legislature referendum. venture One In potentially in with to casino with to upon Richmond joint permitting build a a PXE's Virginia addition, assumed Richmond, proceed we the Urban

key seek to over provides years company for with expands and as the acquisition strategic operation. PXE our expand we beyond company our venues segments in significantly next and casino growth us focus XX are in the to HRM footprint. our existing also opportunities currently the five material The HRMs a

returns build Hampshire, record beyond. capital developed investments this with Kentucky we seek on New in perhaps track high-growth, high-margin have segment excellent and We that to in Virginia, and will on

to HRM be the the track southern we of on completed is Virginia, third Rosie's facility portion Emporia the that state. constructing of This in in quarter In is are venue XXXX. XXX-unit a the

larger extremely important building around project HRM In its Virginia, is XX. located D.C. in addition, the to we Dumfries, an is directly which Interstate Northern given in D.C. of and miles the in because significantly facility proximity of off This area. long-term Northern Virginia Washington, XX potential the population Washington, of south are a

the are remaining locations localities. candidates identifying for same additional After relevant At we entertainment that required suitable successful run our time, are to venues. HRM in are we the finding locations, referendums

to With subsequently We learned under earnings that plans will in and HRM share venue respect or operations the we later Virginia Kentucky. lessons more we will pursue, from successful build in on upon our developments our call. construction every

the expansion HRM and new the gaming in by of floor the positive We second Derby City Derby our the [indiscernible] expect XXXX and continue to of with momentum with venue of Downtown and fourth City hotel the of Downtown entertainment in Kentucky opening end quarter XXXX. Gaming the the in completion quarter,

in to of In design HRM are Western new Kentucky, facility into into Owensboro we and excited phase our market. the this tap are deep

We levels and will of infrastructure Ellis HRM to at also investing be modest Park. and facility additional capital Racetrack

we if to aware, additional that we our an associated have calls, are discuss we HRM pursue deploying subsequent when with opportunity extension will earnings a decide Oak in and and location. you As explore Grove license

and that are developing plans to property local support serving will we will many charities jobs to Hampshire, also number Salem of New create in provide a surrounding a significant In construct communities.

excise charities contributed a most of our has before, structure discussed that Hampshire in direction. to for directly taxes which unique HRMs, the pay I've As we are at New

We more project this on fulsome our will progress calls. provide earnings update on a for future

more we heavily expect process We to specifics. significant are is our in ready one be provide a and engaged the this which we venture not if planning to contributor are HRM to segment today even

well last Exacta to the company All other our operations serve. Exacta's technology. to as cost ensure enable continue the ongoing business attributes game that of entry important into success HRM our that provider earnings Virginia reliability Hampshire our will acquire the will continued improve and is those Systems, and us our we available things its Since technology the to into New to HRM definitive a customers a call, the Exacta announced Exacta that investment Integrating leading and on system. made determinant of as we system in central to agreement are of structure

performance closing and time. will noting have our regulatory central state worth the in vendor The and transaction another time. serviced we dependent technology HRM expect very is happy to are of operations and at greatly that at including by not on is Virginia satisfying that determinant It announce Hampshire. provider, Kentucky this and quality we acquiring of technology Exacta Exacta this a date our remain We improve do closing conditions, with New approvals, that operations various own and the

the maintaining a Turning sports online exit and online the pivoted of our facilities. carefully our while planning we our operations. of gaming In sports and business, operations casino and did XXXX, out job nice team to our retail

also racing betting while the sports believe TwinSpires to horse millions customers BXC horse platforms pursuing permit a technology also BXB on as wagering to our expand directly the will wagering horse introduced sports We our coming integrating in We racing towards wagering capabilities. suite into the We racing growing and that through committed operational BXB business remain fully on sports of pivoted model. years our of of are strategy online online.

the Arlington who property February of Twinspires.com the will for finally, more continue Chicago centric XX, destination be $XXX want completed experience. a comprehensive we a the serious horseplayers on million. last to for Bears Racetrack week, pari-mutuel And to sale Park

gain the sale to results. on In exchange with using summary, our a financial qualifying record the related transactions. company tremendous taxes federal the deferred for year XXXX We XXXX was

in in EBITDA HRM cash of that by drive investments We in Churchill a and assets free are well positioned for ongoing Terra PXE fueled will XXXX, are making projects the increase project which iconic coming states material our Downs the XXXX our in in Racetrack, years beyond. and all in the and Indiana, by adjusted collectively numerous organic of we our acquisition asset, flow growth our and Haute

opportunities overreaching pursue us of which we grow growing industry. the that best Our all our greenfield Kentucky as are of our have one objective at, to in developing Derby, sheets organic company demonstrated as good fit profile, what the balance acquisitions and allow executing while to the we well is maintaining

shareholder of a over results deliver team to the are leaders possible long-term. investors and and our business total who to have have the great for return building create these members We group best helped our

the set fourth and of who a of capital in Andrea extend would We Andrea public experiences practices. quarter. knowledge brings our like including human Board, broad deep a special Board to company of welcome to best our Carter, Directors to compensation joined

join We grateful to chosen company. she that are has our

With the that, to Marcia? we then take will call questions. your over I'll turn and Marcia,

everyone. morning, good and Bill, Thanks,

As EBITDA for record revenue delivered we Bill record year. the shared, and adjusted

then continuing few insights a adjusted with financial provide I'll some have an XXXX, operations delivered and start every year record capital and will initial on on Excluding XXXX. we provide record management. update EBITDA revenue thoughts since on these I XXXX. from results

as acquisition discussed, on we PXE completed Bill XXXX. November First, X, the

The in of in financials new adjusted properties in acquisition $XX benefits growth contributed gaming property full-year of million six Racetrack New HRM Iowa revenue Rock and in Virginia, the function step addition create Hard a realize as and of EBITDA XXXX The York property Downs acquisition. of gaming Colonial and we million will the the fourth these net of of $XXX quarter. Lago properties the clearly this our in Del

in In team to realize will HRM begin of properties to our XXXX, be also Virginia. will we making the benefits expect the to the enhancements

Over the properties realize acquisition to of to the additional Exacta. these benefits longer-term, we expect from

our We HRM saw in properties. Nashville, Kentucky also we facility we our as continue penetrate Grove our and strong continued Oak Southwestern existing at to at Kentucky Tennessee markets. the our HRM properties Second, from new expansion growth and HRM

at gaming from our expansion some team in despite and floor build-out. Gaming City XXXX Derby Our delivered good growth disruption also hotel

properties. growth and these continued from XXXX in have will beyond We

property We we the New to addition Turfway Gaming Salem, also property well of of in from on City opened the Kentucky in facility Ellis as our in City the expect table properties Park and HRM Derby addition longer-term game Louisville, HRM and Owensboro, and downtown from the that HRM Chasers, our September, as Hampshire. layer growth Park of our

$XX first the the which EBITDA and on celebrated adjusted Derby first addition economics, of overall May Racetrack. at to of and we grow Week adjusted expect the Derby million since $XX XXXX time Based other margins full to capacity turn with desirable sponsorships we Saturday Downs on Week Racetrack million. pandemic, the the growth in Third, Churchill drove Downs for level a for in record for Churchill first EBITDA experience very expected

million year-over-year decision sports strategic operations an improvement of facilities. to sports all online This nice our and the of out adjusted maintaining the pivoted online casino job retail a related and we sports our XXXX, in carefully business, Fourth, our our resulted did we casino gaming of in to $XX states could in of working quickly business. and and the while team EBITDA exit

and with a and we Said sports EBITDA another our loss adjusted casino for in of ended of $X way, XXXX. up nominal retail online combined million business

Looking the forward a online operations reasonable with nominal to high sports would return our from from XXXX, continue single-digits to we impact business. to generate expect remaining our sports retail in

Fifth, wagering online TwinSpires we at of of business, a compared to our to our returned horseracing the instead expected, casual wagering patrons regarding as prior-year. brick-and-mortar facilities portion

horseracing business TwinSpires handle and lower our adjusted also Therefore, lower in therefore, generated EBITDA. pari-mutuel XXXX

adjusted Although all from final of were up when still margins margins racing when more XXXX, were than it XX%. wagers is with all for the with XXXX U.S. XX% a yet to on a adjusted estimate are XX% up slight point XX% numbers which the by we that in delivered not Despite decline this online. available wagers compare in pleased business XXXX, placed are significantly XXXX approximately in that EBITDA of to and we growing XXXX we EBITDA, strong online,

And last, regarding our gaming business.

our grew in of adjusted gaming EBITDA our Mississippi properties Pennsylvania compared XXXX. properties, XXXX to All and regional except

compared incremental generated adjusted an million XX% in EBITDA same-store or XXXX. $XX to wholly-owned Our casinos growth

margin owned XXXX XXXX. to down casino compared points wholly were two Our same-store

basis However, our were points nearly the XXXX. same margins on compared to seven up

both Regarding expansions EBITDA record Des at Valley Gaming last and revenue reflecting investments, year. properties of and these delivered adjusted Rivers record equity for both our Miami XXXX, the Plaines

concerns, weather we properties quarter very December, related had the our the Although year, of some have month start economic strong was due for to and a fourth lingering regional the especially January. during in challenges softer to gaming

definitive However, draw any to it trends. is early these difficult conclusions from

XXXX, in delivered Overall, are pleased in believe has very we the we with grow we XXXX. are to that very team results positioned to and well our continue

primarily cash businesses. a million to flow of $XX We result over generated as strong our generated XXXX, up of capital prior-year, cash million flow free the management. Turning $XXX in the from

facilities. is XXXX we spend in and million $XX spent XXXX to in XXXX. in Iowa by addition capital projects $XX at the maintenance our anticipated driven million at XXXth the capital, preparation Derby maintenance Park maintenance $XX properties, Kentucky Regarding York, incremental Churchill Racetrack expect The Virginia, and New Ellis of increase in million projects for to our for and Downs maintenance gaming regional

to $XXX Regarding in spend project we $XXX capital, million and and spent XXXX. between XXXX $XXX in expect million million

reflecting leverage average fourth At we share the Regarding approximately $XXX repurchased the belief share in in repurchases, approximately of X.Xx. our $XXX,XXX value XXXX, price of quarter bank our at long-term share, per covenant December an was of shares. the end our

as Our bank X capital of the covenant and Based investments, closing to leverage of closing result expected expect leverage the PXE our our increased acquisition in on our a Exacta acquisition Derby expect the last of in Kentucky year. XXXX ongoing remain online. on over of come net our net November We investments range investments then in Resort and bank our leverage decline coming Xx the in Haute to the year. Casino XXXX Dumfries, our as covenant Terra we and

our to on week. intend is that transaction Term bank Loan XXXX. We this due the to We in $XXX within commitments million close of existing financing next increase received total A

use repay the outstanding borrowings credit we will our to that have We under revolving facility. proceeds

the the look can coming institutions all and debt support months forward We work continued exclusive our these investments We to with further growth uncertainty. bank support new markets market bank and group. our in the of to to the financial assets. that continued existing to for high-performing you know given welcome appreciate times continuing future We access in these banks challenging our to be group from four

beyond financial amount our will Bill of given portfolio company adjusted record we was unique year And and even flow. XXXX as significant be will our with closing, cash a better expect for free assets said, results. generate tremendous XXXX a that and In EBITDA of

Bill? long-term Our I'll shareholder ongoing that Bill With for call turn over commitment call open to our create can questions. to back shareholders the to that, so he value. the

Marcia. Thank you,

ready we're questions Okay, to everyone, now. I take think your

fire away. So

Thank line And Jefferies. Katz from first the comes you. of with David question [Operator Instructions]. our

is kind good over closed that morning. done going or so, lot I of what a year wanted Hi, of building both earnings an forward. the of with just I you will to past think, you've kind pipeline on, generate touch awful

kind we moment? table, more probabilities that prospects there's or to before be we -- going set of the end for get would of XXXX? what to Just the what there'll are and the have added consider pipeline you chew to the to the we swallow Or

going across we make good, we're we Bill. understand balance sheet slow pretty It's constantly looks not work down. David. work capital and Thanks, teams. We and that all to The constantly pipeline managing needs, sure our on to our our

teams. excellent well. have We and the company scaled built We've

teams that excellent the stage. are have in projects in place to We harvesting digest the

And pipeline landing to future it. success, be no So pipeline. going process or of We're future the that while at will in ongoing. the targets of there's guarantee keep

We doing. have we're a what in good formula, and we're confident

And we're so what we'll keep doing doing.

that think can just stop don't indication you've We just we that digest really that we busy to sort be our digest that seen I things and we'll for of add hunt an what So it's now should we us because while future. have.

like would that? levers sort could you visibility Fair there. And like but of some, input from should there's Xx right? Okay. you lot do, choose could if you perspective lot to get do economic you enough. also say, -- of in? leverage, I fairly Marcia, out you get a inside How the the to to pull And leverage have There's just limited of of to would about kind where settle a what a I on and

have job think I have leverage we've and to sense. the that we us to Bill We leverage. Xx be leverage that There's been done our over said we in range. we Xx a dropped leverage we made would managing our strive be than higher to the -- less strategic when people effective very As of time. has into said, in higher as go where Xx challenged opportunities said, had But times

that Clearly, well. diligent share have deliver the up But of on with we our we support our And when the was leverage banks a working to very acquisition from and will through was in our we that on. market be We X.Xx. as great I very we're as we very And managing lever one from always strategic leverage Bill in work closely took very managing great for PXE that. repurchases a we and use us. opportunity And have can capital. our support opportunities closely. debt great great the opportunistic managing

Got you.

Thank much. very Okay. you

Thank you.

question comes of from Politzer next Your Dan Wells line the with Fargo.

good Hey, everyone. morning questions. taking for my And thanks

they do products you One, on how think Exacta Virginia, any of evolving about is And over properties. or I pretty you you've probably call First, acquisition out additional two, and look you'd slot seasonality install for time over strong, the there? from HRM think owned given this to the time OEMs that XX% maybe in anything new the these around couple the margin were that would market? margins, months there

Good for the morning, Dan. Thanks question.

we obviously, acquisition, grow some to time a that over the thought sustainability the that things business the of enhance of we would model confidence on felt there, doing lot bring So in we'd and and business the party it.

do we're that, it, guidance a beyond to don't provide want operators this at point and into of margins. new specific lot I But

a as us that's company. they're very see very always Although that high. and focus you And a generally, can for strong they're

We are a margin-focused company.

a as of really you're there for bit there that And a are up, any or of XXXX? into quarter pulled last even Or the specific it guidance stuff both was Were XXXX. of kind looking the then projects being Thanks. costs? versus CapEx, project your now at just step as was maintenance I think on projects additional little in that well it. terms Got

timing. size. really it's Dan, always think, It's difficult, the I given just

to We capital. have related of capital billion over the $X flight in project

And the so timing estimates around just of it's timing, updated the projected spend.

when Obviously, just when to that might little a cash 'XX and expected the not 'XX we So bit door. Dumfries that timing the of far as the we moved dollars between changed. project total expect as overall, that has to spending occur. It's the timing go around really has the out have and

some that's On and to current Derby Again, think the example, the properties the related to XXXth have maintenance capital we in included the for regional that there's project Park, other to now I we some spend additional and side, additional do always variation. why for capital are our better projects we've related some of gaming maintenance included difficult things. to And these included to and related go have will are want cash estimates we outlook. exactly ahead when some out, refreshes Ellis some

Thanks the color. for Understood.

Thanks Dan.

comes Thank question with you. And next from the Beynon our of line Chad Macquarie.

maybe to easier, broader Maybe consumer bigger taking of of might really Thanks this some at my make it stronger-than-expected just employment wanted ones. you. that the anything of you're some about kind a these CapEx good the kind tight thinking CapEx terms for Hi, Thank continue offset on changed market facilities? question. around dollar given morning. just where of be projects. in the how tough Has focusing returns of I on staff a it question by to to Or is time?

see we about think these terms we a months. of When years, we in over not or think month two trends projects,

not we not perform any expect hasn't material time. really change. only been been projects there in been change, these how There's perceive change there not So over projects and any any has to these

and of you. consumer, might stable sure But Bill, quarter, And prepared a markets anything Thanks. database in terms remarks, was about in of the you talked in continuing been kind we albeit it just and is think strong? -- and be canaries saw any Great. different I'm you finding are loyalty that be of weather in in all things I the direction fourth else we're that Thank your what seeing there had like per the looking in for in your 'XX? some consistent, was the we impact tiers seeing them of or spend looks trip change to was there nobody versus currently.

the based conclude of of amount data. in weekly generally But any a saw big, category. on that's while remarkable changes the the see that data there this being of and on in anything pay periods even we to wasn't case, we're we monthly inclined think worthy data Canary see, attention lot we short not we of to don't discussion to report call. I big -- Yes, short And

good Thanks luck. and it. Appreciate

Thanks Chad.

comes our of And Pardon line of button. question with the next mute Shaun Kelley me. from check you. Thank Bank your America. please Shaun,

Hi, can you hear now? me

we Yes, hear you, can Shaun.

Okay. Great.

you're apologize as far you here of remarks. Sorry about the learnings Bill, we from so this this just sort any we is back financial that. the or -- I everything about your missed anything I things taking kind bit any But more of time opposite, to our a some pieces if learning go as you are roll sleeves kind sort be chance in integration of prepared of sort that as business that that into start that of move to could to that PXE of opportunities the than own first now just little and with impacts. the see and What the expected excited that seeing are you're XXXX? standpoint of up

as the the excited about in acquisition did pretty we Virginia. We're opportunities

believe And saw public of that I the the we think pretty of months sort fundamental opportunity. picture. Virginia last So of -- results, the the underlying robust in two a strength in

about what So purchased. we we good feel

it's to execution, and process planning integration the of report. to find unremarkable terms going In

of lot at of things. Our teams these really a experience big acquisitions. It's have with sorts we acquisition, experienced a but

other ahead with very this date comment we've what nothing So remarkable point to pleased to on been speed and than we've at full seen.

performance your as business trajectory here a TwinSpires my you. all? we follow-up, long-term or and return are is thoughts Can And Thank just that Has stabilized we that at XXXX. Great. the level? of Can fit underneath to kind the about at stabilized its in that continue does -- shift? then of growth? kind of as medium growth some Marcia you stable year? seeing -- what on you then how more just in we in this little all back up that bit that, And online give to that us mentioned mix? sort Has starting ramp in can and my [indiscernible] exit -- Or of that

in back COVID online into going increased. So greatly 'XX, share the

or got -- back north of began progression of think it the level a XX% a new as ended, norm towards online COVID and I between this the the XX%. around brick-and-mortar we And split channel.

to course second it XX% was then the around or of over north. Going COVID, stabilized it up half XXXX, COVID, the year XX%. it the In And XX%. of way towards into bounced around

As we online in in around seen at stable numbers Marcia But we final up said think so. industry right We haven't or the those XX% remarks, that's show her for numbers will think XXXX. now.

it expect We many will for online. trend years on to grow been shifting that's brick-and-mortar the going start to with but handle just, of between

We've will what But disruption, of So had trend because we sure for online. to there know to COVID. don't prior happen. COVID, was consistent a moving some of handle

stepped see you'll expectation reasonable a that grow. a level time, start XX% over might the that trend expectation the new it's reasonable to up at XX%, in a it's area, Now it

horse currently it effect that thing. don't provide ought a customers The product, the directly for to in not BXC online and clear other this belong introduce to ADW, ways should overall model out auto the our picture more be that there introduce to racing, the though pans it good there, to is horse the millions them sports of thing are that ought affects all entirely our that that racing and para-mutual to efforts to out product

But we cause of just optimistic for to optimism, how market years. providers generally, an and how picture. monitor is and out that share it's but have whole within plays have that next we'll something that watch see shifts But couple we'll between over the

executing you're you a all and plan, For ends have circumstances. best you have strategy like given is us it often when you and feel the the

much. Thank you very

Thank our the Joe you. comes from Stauff Susquehanna. line next question of And with

to think -- to Good mentioned end back this as the local you guess had And run morning about referendums. can is, units additional that. what's you Bill. right locations, kind outlook what say find, you'll year. you'll add Bill, to go add you question around by beyond Bill, you Virginia. the wanted of to of of and I I my Marcia, X,XXX of be kind have kind

you to ability up think I the to have at five. least go

sort question And so to about think capacity that's is additional of how Virginia? the largely my in

Yes.

So deploy that allowed up X,XXX machines. in works construct we're way to various Virginia our the law venues the across way the is to the works,

As X,XXX deployed. they acquired about we PXE, had

now, X,XXX have open. which X,XXX other deployed, over right have deploy across Dumfries venues we we So time that and means we to

of on number size based the So within. have stay that's referendum often depending venue the then on And the ultimate to the where highest location, venue locality various that run. are categories we was there

if So like market, Hampton full XXX more. something and wish we and in or have you deploy machines XXX, we the the Richmond can there, deployed we've you could take

we've deployed full XXX. the So

places can facility you is XXX. that Emporia building, Other we're the maximum a of ultimate only there. deploy where Dumfries to go you exception the can like up X,XXX

parameters of as question. written. are working some those a law X,XXX is of your So the we're answer that Joe starting within, machines the total with that currently helps, Hopefully,

answered your think I I question.

just the reopen Northern entrance. gaming food to entrance around so, would you'll wanted kind right when Turfway kind my I of you. open? a about kind wondering or that early City launched. know I Yes, but But I ramping and in couple are when of ask of the Derby just I did. beverage, hotel of guess, properties to second northern launch, follow-up Thank maybe inquire to the you that June And obviously is and about you of expect process guess,

profile, terms continues quarter. then in nicely a Oak to Grove Oak margin or of to think how the where whether about 'XX, And property? ramp, grew fourth a Grove say profile be it in growth that revenue is in And

Sure.

Gaming, entrance should City So the the Derby open question around hotel North in June first area. about the May, your

those So down. we being dates about good pretty feel locked

in those frame. are and -- time not right. So exactly the right It's

pleased being So the right we're project, given now, facility, construction it very with it's the north the very compromised including closed. that with still how performs entrance

that well. job and a So nice they've with that. team have really extremely really done Bill through the navigated

a interesting here's With respect thing to Oak HRM properties. Grove, really about

really figured formula maturity. hit when the haven't out We they for

existing terms market the based being just knowledge growing at Derby still showing oldest in customer our projects, recognition of offer. not City of are and Our what being Gaming on of maturity, base we current the the attributes still developing name within yet

We're designed a a So phenomena to ramp-up we particularly reached Oak where further distance in look maturation state exactly people the call which itself. still you at maturity that away are all Grove you. properties the Oak but of yet. it the appears are data I the level tell haven't we from And a to in in pull or process, Grove, from that property I we can't would I like very don't from be think much can tell what stage. want you

a Oak Grove with not Nashville in is and Tennessee the It's on into huge population. a communities, community really side. surrounding Hartsville including reaching

as things a to that experiencing still is good to yet. come step-up numbers tell it as property can as far we sort showed, and hasn't of year's more as So tries there last find functions maturity

Thanks a lot.

Thank our from Securities. comes And with next question you. of Bender line JMP the Jordan

capturing the states potentially what move of job to done several Bill that you've that question. Thanks any states offer nice HRM? taking for Can a HRM talk in product. Great. could market legalize you hearing or you're existing maybe about the the my

for Certainly, model the they've the the deployed I and companies states. that involved have win-wins for think in HRM states been the them,

-- levels I with see discussions any it. seen that But always expectations product. that, have that I that share don't this other legislative states states authorizes at So have there be are and today cycle in there'll that another think introducing you'll of there's to you various state about

specific for we on along in subsequent you the certainly, something But something tell future calls, lines. I more hope earnings that's those have work to we and

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you. Thank Great.

of Omer Thank next from you. Sander with question the comes And our line JPMorgan.

about projects for morning. capacity portfolio growth coming taking Good there? Virginia existing your of my and Rosie's, the the in think the impact questions. casino online to both do and How to impact Thanks new potential you

in the of Well, all in southern models, outside commercial of casinos Virginia, terms new so the portion the the HRM of are in our state. capacity

Venton property, particular. Hampton in we'll watch the property impact and on So have our their to

PXE, Virginia. in we environment to our when in the the that opportunity factor too had tell. very we and as competitive and Obviously, So it's included purchased aware analysis that we're there part of early of of

far, so opened casino But there's very it only one opened commercial and that's recently.

have available it of like And share. of when we real really only said, all optimizing, is so all process. to strong constrained. X,XXX I in state. We'll data part capacity our we're see machines out that any allowed our concerns use planning it points numbers. the across biggest one But was to together publicly And We're comes don't across the state,

analysis where best we of machines. of deploy do So it's our our part

jump some ramp Thank Hampshire. there? opportunity Great. resemble profile then of How could there? maybe the projects at Could and to I it New about City do Kentucky you Derby you've the like Chasers if the just you. think and And seen success the

about the excited really potential We're there.

Hampshire sits state, Massachusetts a New While where small itself Salem is border. the on as is it

as to populated HRM and try do there sure the densely a process facility greater we we But Boston make planning of making So you what for market. and requires we of you That's project it that is careful do an is a it the thing time long-term. thought it's opportunity do kind region the in for we're new and right a design really in how it. sure where our well. do carefully and us, the is And terms mindset

In particular, be most involve us, At do not in models this games, different of it a Virginia the New point model whether Kentucky. but Hampshire. or for table that's

with New comes traditional Hampshire table games.

particular another and traditional So that table advantage the additive to games, HRM that's the for HRMs are market.

Great. Thank you.

Omer. Thanks

like to Bill for hand any Thank the over you. CEO, I now to call closing back remarks. Carstanjen would

We we'll and of to you our today. -- in interest as Thank to try your us investors, all good you we're you in trust your for us. your investment Thank your company. and our of in stewards have humbled time all be for

right you So when our weeks Take care. thanks eight we earnings the very have much, and before call Kentucky Derby. we'll talk just about to

conference you Ladies and and disconnect. you may today's Thank concludes this participating, now call. gentlemen, for