PENN Entertainment (PENN) 4 Aug 222022 Q2 Earnings call transcript

Greetings, and welcome to the PENN Entertainment Second Quarter Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator instructions] It is now my pleasure to turn the conference over to Joe Jaffoni, Investor Relations. Please, go ahead.

Dina. you, Thank thank second and for PENN joining Good conference you call. XXXX quarter Entertainment's morning everyone We'll management's I'll your questions Harbor get well and as to disclosure. answers, presentations and but first, review Safe momentarily, the comments as

should forward-looking statements addition the XXXX, conditions, conference or of such statements capital current operating intends, results. and which or terminologies the of future current involve call these statements the Litigation use or Securities but strategies, These uncertainties, or within discussion today's or expenditures, the similar and are statements company's risks to Private guarantees not strategies plans, anticipates will, acquisitions, and believes, historical can forward-looking future risks, Reform expects, the other In by estimates, or seeks, variations of reflect meaning performance. expectations developments, forward-looking events, by plans, of of Such be facts and including identified negative words beliefs, contains or Act as uncertainties. of future projects, of performance, may,

in on reports GAAP, filings that, now Jay, to CEO, financial any on turn pleasure required, today's PENN the and publicly update my the reconciliation measures company's ahead. webcast results non-GAAP announcement actual risks the in financial expectations. press Snowden. to and measures The well the include and today's measures forward-looking found and comparable release call within forward-looking associated company's SEC website. financial accordance go the Jay described non-GAAP can the with will the as of most With materially the it's the And with of G. presented a be XX-K meaning Regulation no in over or statements. including obligation Commission, directly please and when calculated Form company's company's to as from XX-Q. revise Form assumes such, Exchange National to Today's may statements and news call vary Securities are As uncertainties in with

Thanks morning, everyone. Joe. Good

George, today as and members Joining our CFO, Todd of as well Felicia of Operations, me Hendrix, other Team. our is our Head Executive

have investor earnings As provided be release, our remarks. we usual, link and to referring deck to which prepared our a in we'll our

no change PENN new our sure Entertainment. company's doubt, to notice and name you logo I'm So

the PENN transformed highly differentiated casino in-house an digital including focused a iCasino business content integrated online casinos, studio. Over reinforced through our opportunities, sports our investments and past owned organic assets, years, leading sports, in which and market few has fully cross-sell our a by strategy, platform on media is retail, state-of-the-art betting technology,

to Our North reflecting sports of legacy new maintains content, entertainment, provider better casino name ties our experiences. while our America's gaming into and integrated evolution leading

that in this in our from racetrack gaming to into the and I'm one his Next proud celebrating of took single next Tim heritage Course, the Carino footsteps the regional month, help Race company company's our story growth follow to the and we'll from is Wilmott's write in country. chapter honored over began. top story. be company's of National anniversary our Peter of where We're which XXth all father how and his also PENN grew companies and

of a second the revenues across our on strong performance terms the operations, results the consistent despite of portfolio. at seven, beat tough In over quarter good slide six against performance comp quarter with generated last see year. consensus our we had thanks retail our segment part last sequential Interactive to you'll upside in both and quarter, and EBITDAR a results, We as and on and

in the properties, second XX, from slide on particularly highlighted restaurants, new remodels, our which branded hotel Sportsbook performed As benefited entertainment, Barstool quarter. destination and well

for last X.X new over opportunities properties future by interactive offerings, provides over and registrations by four million driven the which increased our retail significant has quarters, both growth. database mychoice Our our

growth segment engagement and We of are database. our the VIP ongoing encouraged the visitation in by

addition on the highlighted last quarter unrated at which XX, our available age In stimulus and and segment this is our entertainment XX casino year-over-year players across increases above, those second in theoretical federal options slide and to year-over-year, the except online rated year of segments, reflect trends all offerings of into to though mychoice and outside loyalty payments offerings more year conversion strong our program. due partly non-rated also down

Turning to slide XX.

and continue also cashless omnichannel growth. cardless, Cs engagement X and drive our Our contactless to technology

to and Guests via now out at the end Our play higher that are XX technology available additional level more loyal, in to a experience properties property when this and states, at mobile generate our expect total is of use and across value calendar pending nine regulatory online engage cashless mywallet properties approval. but roll three we wallet with offerings engaging by with a a the higher spend also only us when channels. not multiple who us they visiting year,

results we believe notably quarter second XXXX billion our maintain $X.XX billion We level between EBITDAR quarter and approximately strong environment $X.XXX we've that billion billion. revenue current XX%. $X range, guidance which revenue in our to are last Given at margins this increased and July, of in decided current property our $X.XX to volumes EBITDAR to in to sustainable

Turning the third EBITDA betting start Ontario starting for occur to and gaming along to growth track quarter of million contribution experienced year. sports track largest in the approximately quarter portion and to of markets like ballot Kansas, on new due with be skin we The losses on California in year. of the profitable remain reimbursements the the initiative, nearly will deliver in our fourth this season the remain football to partners. to of our to $XX year-over-year Interactive this of excluding XXX% tax quarter, the We loss We segment. revenue third-party impact

are resonating opportunities. As XX, our slide the and younger creating Barstool-branded sportsbooks retail demographics really on highlighted with cross-sell meaningful

set seeing Barstool experiences, sportsbook are from encouraging new Our Charles, we recently converted in results for a the standard Sportsbook Louisiana, and Lake very retail edition.

sportsbook place based in on this and Kansas databases. ongoing the our retail in about are we where by Barstool market-leading And is Ohio open track to also Park bolstered properties sports Louisiana, on fall. wagering yet have birth our And to at end to Baton Sportsbook are large casino legislature XXXX. L’Auberge we We by the Barstool And success in similar year. add another this launches upcoming Rouge excited betting and launch Plainridge possible of with the the in anticipated we're Casino, our mobile recently Sportsbook Massachusetts, of approving optimistic home

Turning to slide XX.

the of greater and of the discussed platform XX% than transitioning at building our to undertaking, allows in of theScore, significantly this drive I'm the to ecosystem. Bet, Our and product our mobile significantly us with the iCasino. benefits the Ontario. a early project on fully diligently that completed This we launch launch and sportsbook in and massive engineering app of in to on industry-leading brand we roadmap proprietary between trading Bet on in-house on in into results the infrastructure which future. technology, Bet successful demonstrates last expertise allowing up want acquired risk Canada of very clearly theScore of Custom engineering betting we theScore us X, demonstrates for season. and When sets our interactive theScore, corporate well and executed teams. April that product to components all cross-sell a share have included month the of pleased worked product following PENN of Ontario and enhanced last the which an operations the media at successfully Ontario of theScore integrated strength that summer I this a stronger be working platform results a fall team couple we trading vertical years deployed and who risk This extremely XXXX. our towards integration ahead our theScore a to PENN over is all members schedule, sportsbook so the in live thank Interactive us and

integrated of online previously, about numerous. operation talked betting benefits we the are As vertically a

broadened slide Bet on offerings and in-game and event You'll increased see props wagering theScore we've options. XX,

and us that user integration capabilities, and Second, owning personalization create of engaged subsequently media this retained greater to platform all betting components allowing bespoke customers. and meaningfully are experiences unlocks

XX provides on faster, timeframes build the valuable and over wider third-party realize features. on costs, new that launch savings operating reliable we're finally, shorter platform Third, a we to And driving while next will more platform margins. months

improved on working with are and the here a U.S. technology marketing in realize in the to transition our and ensure to management providers platform promotional track And to and existing in XXXX. theScore smooth meaningful we'll trading the U.S. player remain to transition account we Post Barstool of begin capabilities. our of process. also the Sportsbook synergies the stack cost including benefits We migration, in-house third full quarter

slide XX develop to Game PENN to and continues XX, highly content. engaging our Studios Turning

and deep a table and our iCasino also both and we content new Bet. across introduced have customized pipeline And XX slot This iCasino quarter, theScore of we for Barstool game third-party platform. offerings future third-party

front on theScore and growth As always outside-of-the-box continue media reach, its you'll slide we expand for continued XX%. year-over-year audience monthly double-digits in sessions has to as see the XX, second opportunities. and while well, on up the build were with growing Barstool quarter to also looking new revenues momentum

Looking upside additional promotion Sportsbook benefits begin of to Barstool the the with is forward, cross realize business for we monetization and believe opportunities. there media we as

quarter, also projects, came again equity our Before inclusion in to particularly on all-in DE&I diversity diversity, fourth in the out note, very that I We once and in turn recently ongoing want our it gaming active we I XX to the this were benchmark front Felicia, over survey. highlighted companies efforts. deck, as with of ESG

is recently, traded turn Magazine America's publicly Best to which Felicia. Diversity, out of over Forbes the In company. Employers With of XXX for highest ranking that, XXX addition, I'll any of it gaming rated us

billion quarter Jay. second million. This revenues of reported morning, we adjusted and $XXX.X $X.X EBITDAR of Thanks

the comp rated segment our EBITDAR impressively, revenue was record just up up our of almost XXXX particularly economic our Based increased X.X% noteworthy, revenues year-over-year and actually all-time against were sequentially. XXXX are trends, despite mentioned, X.X% quarter in same-store we level, consistency and Jay that XXXX and results given sequentially. X% the demand quarter reiterating as second At year-over-year headwinds, and X% guidance. on Our they property an high were our second are down

in earlier this the we press program continued in repurchase noted morning, our quarter. release we As our share

to X average average three $XX.XX share shares In at million. aggregate since under we incremental $XXX million share per have of October acquisition, share XXXX, we we context, program, leaving Subsequent $XXX when million issued put amount share To we an shares total, price million During total, of of months $XX.XX repurchase authorization. repurchased in XXXX, the ended in per $XX.XX an in June $XX.X. price an authorization. this price of price repurchased XX, $XXX XX.X inception for average at shares an the of of $XXX XX million quarter-end, at our $XX our theScore million an at our million million closed of under shares repurchase repurchased average we or an shares of

almost So, at to-date, that we've entirely dilution over a from offset transaction discount. the XX%

details the onto settled regarding was cash In expense, moving corporate further of second quarter, inclusive Now $XX.X quarter. some million. stock-based the awards,

rent Cs combination projects, and retail return-generating room of in including of refunds associated was net balance landlords Casinos traditional cash Barstool $XXX.X and our million $XX.X million, The our a Morgantown $XX York sportsbook. Pennsylvania. maintenance received CapEx were which and was debt and interest was payments Category total taxes X $XX X was project Our on CapEx with our Hollywood to hotel million, of renovations, million, million cash REIT cash was $XX.X the

XXX As had outstanding. we of shares million diluted June fully XXXX, XX,

our expense XXXX of of Regarding settled metrics, $XX stock-based cash million, awards. certain XXXX corporate inclusive modeling expect we

in Our roughly environment, have as our pull current further including plan. reassessing which Jay to of discretionary total our protect will CapEx free is a of million, And return-generating levers in projects. a forecast discuss we million many remains flow to moment, $XXX recessionary cash CapEx $XXX

also there ways to We with high-quality are project come our and simultaneously prudent pipeline, our deliver are cash while experience our continually remaining we can guests evaluating have outflows. the various expect,

which year, For $XXX received, will cash year, the are $XXX forecast interest diluted incremental net before taxes refunds we is for and expense, full fully expected our to repurchases. million million, year cash the $XXX share any for of full shares be for be million full the

facility we amended As A undrawn, a A credit second entered our $XXX facility seven-year that a lenders, a revolver, reminder, from facility. is our million with repay $X were May, from restated Term which into provides credit facilities Term Loan to five-year prior agreement B a upside early The existing was facility various The proceeds for balances. facility million Term the credit Loan transaction $X and used Loan revolving in a the Term and and Loan billion leverage neutral. $XXX and BX billion

quarter with of in the net XX, leverage lease X.XX we liquidity of As and XXXX, times. total inclusive billion of of $X.X June ended adjusted $X.X billion, cash

is inclusive it our reminder, of And total estate fixed of leases, to XX% As turn debt rate. our Jay. with real back I'll that, a

was potential visibility Felicia. in modeling our Thanks remained recognize the and In media the and the recession the challenge theme stable. for right. obviously we beat sum, consistent at environment a as All organic has low continues self-fulfilling That being competitive second performance a execution largely looming this quarter said, drum of on or prophecy, and terms our economic uncertainty a point business. creates whether to

in learning years end of like with case us we from hypothetical pulled might levers a recession have potential illustrate levels. such, of you the a the revenue an As our investor be that of certainly have a what turndown. economic and experience two slides presentation different over with provided dealing the the look can lot impacts few pandemic at last at of for the what We

In as footprint the consumer better growth as changes XX, following Vegas slide regional protect reminder, both against our retail pressures, and ability behavior. interactive see the helps economic our with performed us can a demographic Strip advantage in to experiences the offer in local And than an addition, on Las you against geographically younger XXXX/XXXX diversified and provide while markets, downturn. far

pricing our with costs marketing to If now line. open to including start an in multiple approximately Bottom revenues questions, to management, cash flexible to impact And turning to aggressive XX. line, up approach and and strategies keep our do Dina. balance strong disciplined CapEx it of spend labor way, levers a free prepared provide measures, slide business sheet, us we to that, help in with decline model mitigation to we the are in Finally, through maintain economic meaningful we'll flow XX% offset adjusting cost offerings, see downturn.

Our go ahead. question is Instructions] [Operator line Greff Joe coming the first you. Thank of from JPMorgan. Please with

slide, my to do to compare bracket question. question in you XX-year-old first to Thank relative on it does demographics. land-based XX, at that to buckets, everybody. highlights the to morning, taking XXXX? win XX XXXX younger you how how it XX-and-older, about specifically casino talk where you slide things, deal-by-age And that contrast XX-and-older when three bracket that with changes you levels? Good at look including those side that of then look you for Jay, the database my When referring the

growth started versus Yeah. the XXXX, Great in rates seeing we're is XXXX what growth growth see question, which Joe. here here. significant real seeing Because surprise, much growth starting a significant And than -- we're XXXX. pleasant all growth us obviously younger see more the from versus XX%, talking of XX%, in And of you to honestly, been of to remember, that when demographics, now XX%. on PENN, were XXXX at top has significant we we

saw segment versus the is a XXXX. versus And XX% to specifically XX, we XX of in XX-year-old demographic to to was of quarter, So, XX% and XXXX growth up to XX youngest your the answer XX XXXX. to that the question, XX up second XX%

growth significant still is And versus seeing pleased really of a just a XX-and-above, not So saw actually XXXX oldest And where segment. growth top growth And XXXX, versus again, of most versus to XXXX, growth. you're but XXXX. in decline with course, of that XX on that XX% course, of then I'm XX. that declines showing we're of even still what is we we the in in and the saw XX%

we were in to we're in XX%, rollout, and whatever And to speaks forward. people home. you'll down post that makes actually older more we we're as goes upside -- getting And as post-COVID, comfortable then think leave comfortable XX%. as about XXXX, seeing thinking high older declines we I versus vaccination time XXXX to feel as recall, XX%, that to more where about that down segment dropped and So, segment move it

I ago, XXXX still older versus touched XX% to have of think the down high-teens versus XXXX, you're the in last but down we in quarter two or when quarters up had segment. make we a lot maybe maybe room

Got that it. And older how XX-and-older, then of accounted the And play? they what for does to more compare to those rate historically, buckets, trends? recent two percentage XX of

Yeah.

expect, would order oldest it in goes total youngest sort value of in of theoretical you for to us. As from terms

So, of you're total you're looking is at another probably about of XX XX% that revenue. -- overall oldest our And the segment at the a XX, third looking revenue. to

in of there's XX% oldest of a And lot from is the that a opportunity segment down database. third that significant. given the it's it So

and talk being fourth to U.S. contemplated you we is, -- you that converting interactive investments? at your that and in that maybe thank XQ, then, the Ontario to on gray other then about the maybe be about can profitable your iCasino, then you from both and in as And challenges the before you, interactive, a in in look Jay. market? question we ramp talk maybe thoughts the whether And interactive maybe that ramp excluding to about love of markets would on updated OSB compares over sort I'd my -- switching how Ontario Ontario. relates profitable Can get to comments one-time maybe what that had in in quarter. Great. would And last

a I'll share what moment. Yeah. I in on can Ontario

With you one, which As share, in limited so can the is regard we're shared your question, nothing to yea, Joe, what we know, share I'll of. been great a publicly what has but first somewhat answer. yet, is we're capable

-- U.S. quarter. had in very In second of to the the throughout from third the what a quarter, going one-time the quarter, interactive there. you're much for the But this for accomplishment Obviously, and investment ready at quarter rest for certainly additional the profitable in some investments but the and investments. fourth have products of a quarter quarter of not into look but the and season of -- between quarter fourth you we significant We something launch Ontario, Potentially market we our then just quarter. the states profitability, isn't Kansas. casino. there. quarter, in other we online profit, fourth the It's in in expense But have seeing is are the football deal going we profitable think second being see feel of of think, the only already business in same will additional at and profitable now season third even I in have start anticipated fourth you because real the at being third the we at we end If fourth be in most state when not football total, and in in some look we pronounced about and year. now the what marketplace the just the year, we tech be quarter, a if think stack is getting Ontario and big that given great we feel of confidence launches good I

So that's the interactive side.

look, results. both as we're think, well online I online Ontario, casino with sports pleased betting it the relates to as very as

of walks have in customers sort in media We here slide the a were you that of ecosystem. theScore already that value through

season encouraging and from from of the the media that football. have we're be number out here casino XX%. part XX% during be up and sports we media to to three our sport sports is online higher. U.S. a very do sports America, might is spending going it low lot to of ecosystem differences and to greater clearly U.S., converted And Ontario coming rate College to here what XX%. sports with Canada a is sport get of relates Football So over includes as cross-sell been to already calendar betting. theScore then more that actually our Ontario, it September at volume North is season quarters is tax of busiest as you've think the that versus Ontario, think hockey just that betting to NFL seeing we the got than I remember, of number now partners popularity believe were We better than In one that Canada customers gate get in at for lot in can But think we a expect season even and And be around in that football. popular very though understand what the be time in the We've we solid the in to we robust.

get You and and call so online it, for that's that, on both betting online sports some casino. high-teens, deductions

Canada money And advertising on people -- We'll market. been gray education think with of the ecosystem bringing been spend it of launches. at relates sports it with and of think just they into these realize the don't in very media do a world for followers our the with in maybe new a ability focused operators, we've a the to to little been gray theScore U.S. of I media really then Ontario, we have most market the market thing long conversion into that. in BetXXX have state betting bit that time, clearly, people have on lot been were better. than as differently I And we've a the it's gray pleased in really of paid side -- because an and more

And And a just operators to gray today so, already either of were platform-wise market. there's more we have are than that that want which legal want legal understand we we there's think there they converting to Most X. make is those they make or the understand before sure great. to sure over environment, market April now offerings

thought we money spend Ontario. we would we'll bit as heading well there season. of And But actually a little into in football do we are doing overall, as so,

we'll have be player sports share online where we but released, Again, when numbers both that's market we think and in think double-digit I public in Ontario, casino. a it's yet, we'll don't be. online

Great. And then one quick follow-up here.

before does and of where launch to a of that have states opportunities Regarding -- segment that period does in might the Ohio with post in interactive, investment entire Massachusetts, cause profitability? sizable what losses like for the you you profitability resume you be

Joe, just Yeah. profitability going is I We terms been be what -- to very legalization that so out of the have in we regulators think assumed, X. first clear Ohio day we January laid -- that and the quarter there of fourth

X, Jan right?

Yeah.

a So, media up bit nothing that a would not maybe days of have regulators And paid this Massachusetts, any day be of the QX, leading little a to many, week we're building but preparing material. for that for been that something, into few for then, or or there many months.

And so, I mobile time to a think, live, be but may launch truncated and they've got go it retail a first great, second. line is which then

that we've material. in that will profitability live so, And go be the fourth but that that XXXX. impact but real into If moves late in assumed our assumed some could have -- again could early on quarter, this wrong, XXXX, and we've not mobile

think we we there. those weeks of whether weeks can profitable timelines So, be regardless few a shifts few a here,

Okay. Thank Jay. you,

Kelley go of Please line is the coming America. Bank with Our Shaun of next ahead. from question

sort morning, of operating Good wanted Jay, everyone. Hey. environment. tackle I the just to

had number appreciate do a as that's database there commentary interesting. and You super all well, the of comments in

like markets? some of that just hear as Is of the destination offsetting about of Just of compare at some competitive area I increasing. kind it? but us more deal lay to. the make St. like coming or destination to of you about end think land Or some in as maybe basics. Pennsylvania, And Can environment, of you that and happening, started places have that in the not we is Louis, of particularly could as offsetting is like big some maybe that? kind to promotional out us it the the are properties of lower Mississippi, a think just as just maybe of out promos that? we give in relates kind of the where that, Or

would saying the by I start latter.

out lot a promotional is. the this, is lot what about a being think I made environment of

the of York, at look X number specifically, Pennsylvania opened you that course Pittsburgh, In you of have because Category have there's the in casinos satellite moving last in Morgantown. if over two, XX New of think we a I lot have parts, a one one months.

So, trying you're more operators because entered to that now mix are of the there figure some think shift, what And I the supply right out existing is new existing has that seeing reinvestment is properties marketplace. competition. or

a think, of markets, seeing to these are a Pennsylvania heightened me or is or just or any feeling unique We in in ways. Louis in launched environment a that restaurant I one-off. of then Mississippi, in new variety And have property We're St. promotional two. regard not of So, other may St. or Louis. a with each markets, to the a Mississippi

couple bank on can bit now PENN, property might of is something little new so new a And that a But the in could renovated row. you level or at to hotel business. margin stability months more that your reinvest you XX% a I for sportsbook and think we've four some in and amenities the land-based showcase products We see declared you quarters delivered late from XXXX of a that that felt new we that. or your margin or

the but well. what's in the way don't were And as the that just being think delivery, not been so, if the delivered, us, by set by promotional about, environment margin would consistency see it's you talked competitive I

and on follow-up play that those deteriorating? it would some has a that given across sort my just also level of just payments occurred quarter? help year get just year-over-year believe And segments, little how options be, gave you Great. Is lapped as did that stimulus. down of kind entertainment more of from of of the ago? a that just just we've sense still bulk XXXX, trend that some a us being off the up color And Or Is of still leveled and the sort unrated of though? I of maybe the

Yeah.

in there's that question. a variables, lot answer think to of I the Shaun,

of a a highlight We I think beginning. the few confluence to there's them tried of at factors.

we've teams mychoice think a our into unrated done database -- our moving have ecosystem. really the interactive I foremost, of property players and job teams and First done great

If with rated. move just not big don't is. have a it relationship they're of a that's of out part continuing We're and it's to into and people them, you So, rated, unrated cultivate you number hard cetera. build their cell e-mail their their and name that and phone notifications, know to on deliver if be or et able to push don't what to addresses

going So they business piece that coming from that lot there find the that it. XXXX. is of don't think payments stimulus out money a big I unrated did in of in out XXXX. sort went free than the a there of through system a was doubt, business the you're second No more had quarter in of to ever

naturally in you'd off some XXXX. see drop so, And

course, more there's yet back theaters and nightclubs concerts things in where and weren't and movie options those entertainment XXXX close they and of to and bars and events spend your Of in or to are and your XXXX, sporting they it where sort and to versus all time, in here of there were restaurants XXXX. terms discretionary dollars

rated and So, XXXX. it segment, I age, year-over-year, trends the still versus down roots database look which still we're great. it to expected in moving is unrated. A business because up the you significantly falloff the age is at Every really is unrated good other was lot exception with of database, only if at And Shaun, XX-plus all think is XX% as which worth you is, an over it versus of news look XXXX. people the

at XX% age story So, news group. it continue to really is, for to good chip away us, decline XX-plus have except at the we the everywhere,

you very Very much. clear. Thank

from go Stifel. line coming of the Please next question Wieczynski Steve ahead. is Our with

different the is the Hey. Thanks Steve. in wanted to Good on question brick-and-mortar Jeff for I business questions. on for taking follow-up This way. Shaun's maybe and slightly a start on morning.

amidst various but Pennsylvania, what just markets, prices you portfolio anywhere, Mississippi, given mentioned If cycle, heard bell pressures? this higher for specifically? your earnings you across gas are other tightening We've the potential seeing and sensing all weakness inflationary just any you're look curious Louisiana,

Yeah. that top We out question Jeff. pointed reported one to that get of you you'll the state portfolio. look And this monthly I state and at numbers, Louisiana lot, our states us, your performing there, the for you a think in see is

we're not that. So, feeling

the on competitive your look what set at a market, bit rest the is your in geography competition. way we does of compared where less package market, where is that the does think to casino I and and that it is amenity the what the asset, little on more

to we're not the end would of oldest, about don't And a what we're XXXX the continue think that family, but mid is core in XXXX, couple impacts seeing and have lot tell a maybe that's dated, to higher One than step macro now, some to analyzed fact there unrated it's and that know talked are looming, that the you you've had know softness look to already lower of ones market either we're be and estate, are that on our who and it's very XXXX, had properties worth consumer of recession majority but their all to the not do how our side rapid in the -- amenity a robust. are And amenity assume reported the the properties had pressure. newer if a good seeing you unemployment at recessions that turbulence, most What understandably sense play. heard pockets just about But to opens, if is you makes at consumer, this or over limited significantly vast about to I was There's -- two softness it. the during way, years. no that quarter is turbulence. of falloff comparisons And them really is markets. that explain our the a happening those to the softness. But and a back be I else quality from sort it's earnings, around, this the it into where might and it's I worth one, have there's take value I and really segment, timeframe. surprisingly. so more clearly, maybe continues of the there's head pace. package limited time we're the seeing demographic customer so, customers, We healthy. most are of not things inflationary don't you was And in that in of we've we're happening many this In assets The at XXXX. a that home And XXXX/XXXX the majority internally, XXXX, identical. And right much country the of worth what level acquired on sheet. average in lot maybe last to thing we what that think across are again, have today. the if a vast remember are geographic. of dropping what starting the balance XXXX you're seeing I of know to a package financial impacted built, vast assets that some you impacted lower home a portfolio second real were values the the XX very seeing majority skyrocket it those others people's wallet different And a and the news properties

unemployment And But seeing lows. near going living at multi-decade so, of up. still are cost you're

and grow, are in keeping And You of not continuing pace completely if across but are values country inflation, not that markets. seeing up also grow most steady, close. seeing to the pretty holding wages income the with levels you're maybe home

impact things that casino companies. from the a And how feel gaming results in the we to they goods and companies I seeing lodging that So, shift seeing and today and in consumer actually services. are you're spend the from think

really time But to out, around that in a consumer out like XXXX, there that experienced sure this obviously will in get be today not XXXX, to XXXX, don't preliminarily I'm months daily expect a they be look in and that bookings seeing so, we' in to spend continues business that regional closed all in are a looking out on both terms gaming had in -- non-gaming on a Margins and ramp. everything We basis, we're whatever good. July. we're geopolitical about. we we share have really want saw should And us. concerns wants advance. don't month want in We Especially what hotel spend, July. to consumer books good seeing they great differences. we fun. we wasn't just and We have healthy XXXX. to Interactive XXXX, noise of But have seeing there much just money, the spend healthy. markets, to there don't re still we're There's that Trends you feel in

on casinos, stable. Our core very Margins business good. are the brick-and-mortar

So to context. the think that's but a to answer just provide a simple I question, long

perfect That's segue. a and extremely helpful was

all my end. there on part going what's question policies of now. of the answered comping and You on accounts right Agreed towards XXXX the with next XXXX to on

of that it's the a more just you're Is if versus the methodologies recession, reduces you side analysis, of to wanted from that decline, more you cost forth you levers working mostly spend mitigated what on on, sense? on interesting a, the -- call are through the on of put kind you analysis what be perspective, Just visitation your where of more color really visit that a so makes focus if decline of Just COVID decline to really focus more think things, estimated a be able into curious the run more comping we to XX%? experienced because during shutdown? with XX% cost per encouraging. it, -- do provide a really Can revenue cost I

And Jeff, analysis This swag. of learnings in at that operators XXXX, from just is up here things weeks business, a back sense many one XXXX doing tell It that then on timeframe, we make and does. not made and I the and thought to what turned honestly, is XXXX, this, PENN you, were taking our us would taking was us the out which not sense. bottoms of

spend the that our out lot EBITDA to and disaster margins. I early and of we, a think in of softness in a XXXX, way was XXXX, XXXX, cases, tried to

I And a so that and line don't more to see going private think with fighting share. lot and companies gaming everybody different market repeated. were top there that's strategies out -- you're and There public for

an on to profitably. growing growing your the there's these board of there's where you and that profits environment -- across your earnings more think And revenues as or calls. be much seems I today to listen focus a

about or we're and going that thoughtful I and in and disciplined whatever about into and prudent think definitely in decisions go people judicious remaining are to make. and thinking remaining they the very

Jeff, of remaining accept going maybe and for the a during So, go in amenity customers we mix. about must-have to COVID I a the very that or we're that into and people lot, was hit. versus I a from shutdown really time to What thinking to as terms judicious disciplined in versus have more casinos lot make. offering they a are remaining slowly the obviously, learned nice had learned were a timeframe. and We typical reopen factor, times. other when product We what think a challenged the to willing and think to whatever thoughtful and a and And decisions about prudent definitely in

a typical were versus accept product to what nice from a frame. hit. for a reopen So was lot, customers slowly more maybe and had we as to during have challenged time What willing lot We a obviously, that amenity to shut offering terms We COVID learned versus really casinos the mix. times. to a must-have time a I of learned the when down a think in

we're go disciplined they decisions are going that or and in whatever people remaining thoughtful remaining to definitely think very and in the into and I and prudent judicious make. about thinking about and

factor, very And a company, sometimes of have a as done think industry. gets think, I other rate long we, And time about our of for think time. casinos typical not I during overlooked. a more shut versus we had versus in a a accept blended really must-have were of the I a lot leverage. We chasing to amenity And job reopen lot, willing great learned when -- nice for offering product the a to as obviously, have operating have COVID maybe So Jeff, that gaming We time all margins was that from a we maximizing terms the and learned to of a customers the also because slowly portfolio, challenged a frame. What hit. period tax the in But time diverse we highest and unprofitable down it's what to business. mix.

you And maybe XX% at blended this maybe continue into we're experienced, XX%, certainly, is your levels do. or think heading when good margins, you’re something going other we're we -- operating a levers because less like are so are your lot Nevada when companies assets below. the than markets companies battle or more were when than the COVID. But we're that -- grow more ready, like of challenging in New have most more or than are we their pull to were leverage rate have other to knowledgeable, that XXXX tax tax obviously, that's we XXXX, to negative blended more into to and times closer can And maybe rates same average with we, Jersey in can, I

helpful Extremely much the strong color. quarter. on Thanks congrats very and

Jeff. Thanks

ahead. is next Our with line go Barry Please Securities. the from of Truist coming question Jonas

Hey, guys. wage of to Any labor. growth? or what terms from in wanted I you're updates around shortages labor start seeing Thanks.

apply of certainly somewhere months couldn't to where $XXX,XXX dire, of weeks. side day. I We're anything, better trends roles, come couple more better XXXX. It say Not most interactive better put But markets. well a land-based side. on and school, were are rates the at for and still There behind a took we're through whole Yeah. would people free through roles, positions would certainly if train was lot our for and table plus and today them there's every paying for for say applications Barry, to -- a environment open in we we're we year close in a even these get certain them applicants roles, a the both was as lot, pressure, of and getting seeing wage on certain apply than come as beginning across wouldn't and much dealing the pretty we two we than for of ago positions, would were pockets I some properties the

to that pressure we're wage seeing less that We're certainly And now. seeing seeing applications not We're through. is so, improving. and start come environment

do Cs, think And hoping of on on the full little engagement, when a color you elaborate vision more as enabling could specifically, great. in get maybe everything force you we see was X That's omnichannel full to well? your I if then, could

in lot encouraged. results. We're the very of shared We're Yeah. haven't early -- a we terms whole

want would per more mychoice say decided one very app continue a the our we envision technology and sign the to I level Again, as it's say seeing reasons at theScore, We company, -- wallet say and of capabilities. And team, have mychoice we why vision, event. engineering would likely both higher a to states. amazing our down road, corporate and visit live our retail well publicly. and as before wouldn't across people higher I those that are we And many well to product the in see our We encouraged, offerings, team engaged frequency mywallet of that up I Interactive all and are have start data spend with get scale mywallet acquire capabilities. we're as app sharing of of our and three to more digital. really a PENN with for that technology there's in on and we a we're team we and/or they as in one us visit XXXX XXXX combined multi-channel terms our side. with it's of event, at the

they're but For capabilities, have now, separate. wallet we

land-based our and live land-based anticipate a across So, of properties. to that digital X to you'd benefit wallet to businesses, for different technology regulatory lot this interactive already all pending business Cs of get having see being have starting would a take we're us our and have while a across with digital separate all little approval wallet there, but for to wallet upside the the of on going enhancement. to a verticals. functionality our We It's

Great. Thanks so much, Jay.

is coming line from question of next go Please Macquarie. Beynon Our with Chad the ahead.

question. my taking for Thanks Morning.

cash remind in Barstool allocation? you that about? the can on at help that, us of of the on about terms in-house And undrawn In months? Thanks. that next opportunity to XX quarter, Can end you the you any capital think the sheet revolver talked us within the the take balance

Yeah. We And our we've strong net lease more we're in ended How past, have months. X.X the than are the really our halfway you well adjusted through with doing? quarter we're of just authorization Thank you sheet. proud share leverage we for said times. seven the of in question. -- Look, balance repurchase as

of our So, on things. opportunities is think to lot underappreciating a sheet obviously balance us the gives a We market do different of the valuation. cash lot our

being monitor continue while we're we and face position share again, against really we continue in opportunities advantage be to opportunistic ahead, our the may to to position market at that time. with other conditions weighing in so, remain being buybacks favorable as those And look any that repurchases, able fortunate able to And of of dislocation. a also take given we'll

flow So, generation our our And we' the in re is happy delevering, organically build up your which modeling, sure that leverage. what how is over see balance near-term can I'm with our and continues sheet. really free to cash you

We'll is So, to opportunities. at to we'll continue on conditions, market leverage. taking favorable continue we'll also continue focusing on capital very our low maintaining look we focus what advantage and of growth think a

that but remind then the within the that over agreements. you five pressure, you us on you're analysis next like And space, the I in to with just inflationary companies lease can escalators talked exposed CPI believe you kind Felicia. also Thanks how don't us Great. about of years? some can other on leverage, will remind any the look the operating

Yeah.

of majority leases. fixed Chad. the right, our You're have on absolutely We escalators don't

for we master which our do in our those the PENN Master For leases, But our of on Pinnacle who are XX-Q. in leases, a detail aren't familiar, largest. provide you and that nutshell, our

our components have three We rent. of

base ratio rent by annual is Lease the in then adjustments Pinnacle building which under Master subject adjusted largest is Lease. every X.X:X. to every our revenues. land-based, monthly -- revenue five years two and Columbus to Master of but So, the for change an subject adjusted And base. And and under and But to rent, part PENN subject Toledo, percentage that's which X%, years the to an except to rent it's percentage annual the is building up is escalator rent the

they and they to are CPI. So, not fixed, are tied not

Thank you helpful. very much. Very Perfect.

the ahead. with Katz David Jefferies. of coming is from question Our Please next line go

have I of where talk question. to Good ground, unpack the touch you a taking lot morning. on wanted media in just kind release. performance. just think Hi. I'm trying your press segment of a bit. I in and one And XX, of for do you I slide Interactive the the covered deck, about to my And Thanks little slides the that

the of what And opportunity refers where think opportunity is is? I this the it and terms In slide productivity media What could really there to some go? today, there's but media theScore, Barstool too. obviously

If you with can just us that piece. of sort media help

$XXX about of That's $XX I'm to revenue, million trying at. that what there, or in that's a think tax I get so. gross-up there's has segment and

own Yeah. help not We hoping, you're David, currently some you at as XXX% And helpful don't we maybe it, able own be as to Barstool. get of because of investor. I'll XX% an as

reflect XX% cash flow their so, flowing we any of And have you but of revenue. through, don't

acquired obviously, public, revenues we bit talking that it QX. a is and in We as revenue. experienced them, to base noisy same the were before we're on so, growth of relates specifically double-digit And thing their theScore, it revenue

what on Barstool the So, show terms Once and a obviously, probably say about you in stay we acquisition outlook combined we lot this we'll would look to more interactive segment media like, close be on the within of you more full might next tuned. a detailed of good feel as able a in of really momentum. QX to show we'll detail I year, some different and on like. ideas continuing the now out but thinking as think just been relates about. products with theScore and opportunities that audience I looks and Barstool build monetization that business services about specifically to how working And media we're excited we're P&L, we've what basis it to not and we're for very and and road ecosystem the that down the time

become how can If I future that modeling for up separately will Is the untimed and at a picture? you us give just something some some expect in that at out time? follow it in one point maybe be can sense day total big

David. I do,

today we a see in I sense that we're growth about the those businesses And assets I some think think Interactive I and the we way expect it's But will separately. these that And us we the opportunities. have interactive are think breaking businesses. audience. And we on that down way media where to media that attract it's the about early a within is incumbent XXXX. Barstool makes probably our close of not day media road, would this all harness we two long-term casino. transaction at -- the These a that continue betting out think we'll division. in lot could We in on monetization next again, doing businesses are blended today, those But be within share about businesses once I look, point high monetization to and year. online be lot cross-sell to think new about is that a that creates value and with sports how

road. down think monetization going opportunities and I to cross-sell be there's other the

assets from casino media not more will and our to We to have places of acquired. ramp that online legalize, Ontario obviously, Those betting front overall earnings lot we're all states as ramp a in be of grow and continue that. we've where only planning the the sports with us, we

Okay. Helpful. Thank you.

Okay.

last question. time have for We one

Our ahead. next question Ryan of Please Craig-Hallum is Sigdahl coming go from of the Capital. line

Good Great. morning.

First, the slides, consideration. I especially recession appreciate the

But statements, done guess, tech qualitative you after I can't of on think were a detail give make transition? the helpful. I Ontario, there. can those the before you lot know any nicely comparison I Curious on and and

-- Ryan. time such year slow it's early, really a And just Still it's of sports-wise.

as as relates offer of we, in CRM app are and to obviously, it betting activities. as able our to going well personalization experience more the the terms options So, be to on

whole which will the football regular and be baseball, lot a lot that only sport more a season, next prepared But to probably be not season September/October when at a November. these few onset next way. to when weeks. So, early I answer think, our share -- is on your We'll of there's major in call, you're question in in quarter, we'll thoughtful first know

I guess, or heard glitches Maybe just any haven't a follow-up, we outages, of any.

news no I to So, in out but anything there? news is respect, that think good call

in knocking as the I But for think one. day, you even jinxed than said answer case it's other best I'm the I had scenario. on Benjie Well, Ryan. he that Ryan, just gone wood hoped Levy as us, better

far, good. really so so is season. seeing it up baseball Again, nice there, So, but we're volumes

proprietary July to get we our to back timeline live nice about and terms XXXX. And stack the months so, now is, tech milestone roadmap also and stack summer it of we And we get where our on really the we're migration of -- in to March just thing want volume high in U.S. before XX, all to out platforms, here the critical platforms an we've to intensity madness U.S., that, XX environment the we all through but dates bring and back that that to through users football we tech and entire work volume the that of not season and put on our significant got significant in of convert state do we do in put get across XXXX. of the

we keep to updated once continue We'll start good. so far, so you So, season. football

Thanks, Jay.

Ryan. Thanks,

at And questions we this you. to turning no back call be further have I'll the time.

appreciate rest for one. All you time in, have the quarter dialing in results forward summer. great November. third to look morning with right. a of everybody's I speaking a We Have and this early good for sometime

for That concludes you you participation the your lines. thank ask conference call disconnect and your for that today. We please