Caesars Entertainment, Inc.

Good day and thank you for standing by. Welcome to the Caesars Entertainment First Quarter 2025 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Brian Agnew, Senior Vice President of Corporate Finance, Treasury, and Investor Relations. Please go ahead.

Thank you, Liz, and good afternoon to everyone on the call. Welcome to our conference call to discuss our first quarter 2025 earnings. This afternoon, we issued a press release announcing our financial results for the period ended March 31st, 2025. A copy of the press release is available in the Investor Relations section of our website at .seasors.com, along with a supplementary earnings presentation that management will reference during their comments today on the call. Joining me on the call today are Tom Reig, our CEO, Anthony Carano, our President and Chief Operating Officer, Brett Younger, our Chief Financial Officer, Eric Keshen, President, Seasors Sports, and Online Gaming and Sharice Crumbly, Investor Relations. Before I turn the call over to Anthony, I would like to remind you that during today's conference call, we may make certain forward-looking statements under Safe Harbor Federal Securities Laws, and these statements may or may not come true. Also, during today's call, the company may discuss certain non-GAAP financial measures as defined by SEC Regulation G. Please visit our press releases located on our Investor Relations website for a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure. With that, I will turn the call over to Anthony.

Thank you, Brian, and good afternoon to everyone on the call. We had a good start to 2025 as first quarter consolidated net revenues of 2.8 billion increased 2% and total adjusted EBITDA of 884 million increased 4% year over year. Despite a tough comparison in Las Vegas against the Super Bowl last year and weather disruptions regionally, combined with one less operating day this year compared to last year, our results reflect stable trends within the brick and mortar segments and continued strong growth in digital despite four-hole during March Madness. Starting Las Vegas, same store adjusted EBITDA of 433 million was essentially flat versus the prior year and was the third best Q1 Las Vegas performance on record. During the quarter, our Las Vegas team did an excellent job navigating through a tough Super Bowl comparison to deliver exceptional results. Occupancy and cash ADR were both down slightly, slots and ETG volumes grew year over year, convention room nights were 20% of our mix, and the Forum Convention Center delivered a Q1 EBITDA record. Same store operating expenses were down 3% year over year, a testament to the strong operating discipline of our teams in Las Vegas. Las Vegas EBITDA margins were .2% of 50 basis points year over year. New capital projects in Las Vegas continue to drive better than expected returns, especially recent hotel remodels like the Versailles and Coliseum Towers and F&B projects at both the Flamingo and Planet Hollywood. While we recognize the tremendous uncertainty surrounding the economic impact of potential policy change in the US, we remain encouraged regarding the forward outlook of Las Vegas. We continue to experience solid occupancy trends driven by both Leisure and the Group and Convention customer. Now turning to our regional segment, we delivered 440 million of adjusted EBITDA for the quarter, up 2% versus last year. The regional segment experienced a significant improvement in trend versus the last three quarters of 24, driven by stable same store trends and the contribution from New Orleans and Danville for a full quarter, all despite the negative effect on the quarter from weather disruptions across the portfolio and the extra day last year. The New Orleans and Danville projects completed our elevated capex cycle over the last few years. Both properties are off to a great start and we look forward to harvesting this cash flow for years to come. We are committed to providing the best experience to our guests as evidenced by the significant amount of capex invested into our properties over the last four years. I wanna thank all of our team members for their hard work so far in 2025. Our strong results reflect their dedication to delivering exceptional guest service. With that, I will now turn the call over to Eric for some insights on the first quarter performance in our digital segment.

Thanks, Anthony. Caesar's Digital delivered net revenue of $335 million, up 53 million or 19% year over year and 43 million of adjusted EBITDA up 38 million year over year. Our flow through rate was well in excess of our annual 50% target due to cost controls that we implemented in labor, marketing and overall reinvestment levels. Results in the quarter were driven by growth in both verticals with sports betting, net revenue increasing 9% and I just, you know, net revenue growing 53% year over year. On a whole adjusted basis, we estimate that our digital segment would have grown revenues by roughly 88 million or 31% year over year and EBITDA by approximately 60 million. In sports, net revenue growth was driven by a combination of higher year over year hold and lower promotional activity. We were able to achieve the higher hold despite the well publicized customer friendly basketball outcomes due to our increasing parlay mix, which was up 260 basis points versus last year. Our sports betting customers are responding favorably to our continual product enhancements, particularly within the parlay and cash out categories. We have an exciting roadmap plan for the remainder of the year. In iGaming, we posted another record quarter with net gaming revenue up 53% year over year, driven by 28% volume growth, higher hold percentages and lower reinvestment. Customers continue to respond favorably to the product introductions in the game content and overall user interface. Teasers Palace Online, our highest net revenue generating app, also continues to have the fastest growth. Our newest app, the Horseshoe, is accelerating and already contributing approximately 7% of our segment net gaming revenue. We recently introduced branded live dealer studios in Pennsylvania and New Jersey, both of which have been well received. Our in-house game studio is planning to launch a branded multi-hand blackjack game in the second quarter, which will be our first internally developed product. On the technology side, we remain focused on completing the rollout of our player account management system, which delivers a single wallet across state lines. To date, we've successfully integrated 16 states, including entering the field trial for our William Hill app in Nevada and remain on track to be completed with a full rollout by the end of 2025. In addition, this quarter, we integrated the horse racing app into the shared wallet for select states, and we'll expand that integration throughout the remainder of the year. Our EBITDA for the trailing 12-month period is now in excess of $150 million. I'll pass the call over to Brett for some comments on the balance sheet.

Thanks, Eric. We're very excited to be at the end of our regional investment cycle. We expect 2025 full-year CapEx to be roughly $600 million, excluding our Virginia joint venture, with interest expense also moving down significantly to approximately $775 million. Our nearest maturity is the 8 1 8 stub unsecured notes due to 2027, which we expect to tackle in the near future. Earlier this month, we repurchased $100 million of our stock at an average price of $2384. We will look to continue our track record of debt reduction alongside opportunistic share repurchases as the year unfolds from here. Over to Tom.

Thanks, Brett. Thanks, everybody, for joining. Very pleased with how the quarter came in for us, consistent with what we had been telling you on our fourth quarter call. Vegas was facing a very difficult comp versus Super Bowl last year. If you recall that we had poor hold below our normal range in the first quarter of last year. We got back into our range, albeit just to the left side of that range. We were still about 200 basis points below normal. So on volume and activity, Vegas would have been up. Year over year, we ended up flat. Regional, we were anticipating a pickup in weather coming into this year's first quarter. Last year's first quarter was difficult. As it turns out, this year's first quarter was even more difficult. And in the case of New Orleans, added a terrorist event in the beginning of the quarter. So we had a lot of headwinds against us, still delivered growth as I talked about on our last earnings call. And since the growth in terms of, that was added with Caesars, New Orleans and Danville, Virginia more than offsets the continued competitive impact across markets like Chicago and Council Bluffs in Indianapolis. And we're very pleased with where we sit. To highlight one particular property that kind of illustrates the extremes of what happened in the quarter. New Orleans, the terrorist event on New Year's Eve and then snowstorms in New Orleans had us put up a little over $2 million of EBITDA in January, which is well below any forecast that we would have ever been working off of. February did almost 19 million of EBITDA. Obviously helped by the Super Bowl. And so we get to March and that's kind of our first look in 25 as to what our normalized run rate with no particular weather or Super Bowl impact. And we did over 16 million of EBITDA in March. So feel very good about pacing there and in regionals generally. In digital, obviously everybody's talked about the March Madness sports outcomes and we were not immune. Still posted very strong growth year over year. iCasino continues to be a stellar performer. Our 53% net revenue growth in iCasino is on top of last year's first quarter when we also grew over 50%. So now stacking quarters like that on top of each other is particularly gratifying for us. If you look at what's going on in April just starting in digital, again we're comping to a quarter where iCasino growth was 50% in the second quarter of last year. Through the first 27 days of April, iGaming revenue for us is up almost 70%. So accelerating from where we were in first quarter, feeling very, very good about where we are with Eric and Matt and the team there. And we've talked about, we expect Vegas to grow a little bit this year, Regionals to be flat to slightly up and digital to post strong growth. Obviously we talked about that before all of the tariff news in our fourth quarter call. There's no change in terms of what we're expecting in the business. We still do not see any of the consumer softness that investors seem to be worried about. Our forward bookings still look quite strong. Regionals are still coming in nicely and digital is continuing to post significant growth. So feel very good about that. We're effectively a third of the way through the year. If you want to take the other side, obviously we see the same macro picture you do in terms of what's going to happen with tariffs and consumer spending and inflation. If you are a bear on what's going to happen with the consumer, keep in mind, we have never had in a prior downturn a business segment that's growing like the digital segment is for us. If you look at where consensus is versus where we were last year, you would have to see a dramatic downturn in brick and mortar performance in the last eight months of the year for us to not be a significant grower of EBITDA this year. I'd also touch on, we've talked about how we're at a capital inflection point, capital spend inflection point. We've put up some slides on our investor website that I'd encourage you to take a look at in terms of where and how much we have spent. Now we are in a free cash flow harvesting mode. You should still expect substantially all of our operating free cash flow to be used to pay down debt this year. Recall that we have the $250 million World Series of Poker Note. We expect that that will be monetized in the course of 2025, and those are the funds that were used to buy back stock in April. We will continue to be opportunistic if we can buy our stock at 25% free cash flow yields, you should expect that that will be a piece of our free cash flow usage. But again, substantially all of operating free cash flow we expect to use for debt pay down, that remains the case. And with that, I'll throw it back to the operator for questions.

As a reminder, if you'd like to ask a question at this time, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Carlo Santarelli with Deutsche Bank.

Hey guys, thank you Tom. Tom or Anthony, either one of you wanna take this one, but it has to do with kind of the Las Vegas outlook, what you're seeing in booking and maybe how you guys could give us a sense of, you know, what on the books today is kind of group related as we look through event, where else do you have comfort and visibility? And I'm gonna assume that kind of, if anything would turn up there, but my sense is April, May kind of, and then the back half of the year, your group pace is pretty well firm at this point and just wanna get a sense of the magnitude.

Yeah, that's right, Carlo. You know, the group was about 20% of our first quarter room base that's a little bit higher than the full year number, but we would expect, and that's consistent with what we thought coming into the year. We expect that for us, 2025 will be a record year in group with particular strength in the fourth quarter of the year. And that 26 will be another record group year for us with particular strength in the first quarter of the year. And if you look, if you think about our forward bookings, as is typical, we can see pretty well 90 days into the future and cash room revenue looking forward looks in line with last year's number for the second quarter. You know, we are not operating any differently than we have, you know, over the last couple of years. If we were to start to see softness, we have levers that we can pull, obviously, that you saw as we came out of the pandemic where we were able to outperform peers in the market by tapping in to our database. We have that option, you know, in the case where the economy would soften, we could go deeper into our database, but I wanna make clear, we're not having to do any of that at this point. And, you know, we're mindful of what happens in the broader economy and looking at the same things you're looking at.

Great, thank you, Tom. And then if I could, Eric, last year, I just wanted to kind of clarify something from a reporting perspective. Last year in the two-queue, there was a seemingly outsized kind of other revenue piece outside of the iCasino and sports betting business. Could you kind of talk about what that was? And my guess is that will create a little bit of a headwind in the two-queue this year for, you know, segment-reported net revenue and perhaps EBITDA, but I just wanna kind of better understand what that was and the magnitude of it.

Yeah, that's absolutely right, Carlo. You saw it this quarter, it was around a $6 million headwind on the EBITDA side for us. Those, that category is generally skin revenues as well as revenues that we receive from World Series of Poker that can consist of royalty rights, hosting fees, et cetera. And so as you'd expect, the second quarter and the third quarter when the main event in Las Vegas spans the quarters, that were the peak periods for the World Series of Poker revenues, and those are going to zero. And then the skin revenues, as you'd imagine, with the number of the smaller operators and other providers exiting markets, the skins have deteriorated in terms of what we can command for the royalties there. And so you should expect to see fairly large declines in that segment in Q2 and Q3, and then Q4, it'll be kind of back to normal.

Great, thank you,

Eric. Our next question comes from Brent Montour with Barclays.

Good evening, everybody. Thanks for taking my question. I don't know if this can be quantified, Tom, but you called out, you know, whether last year, whether this year in regionals, and then you have the one-day impact from leap year. Are you able to sort of give us a net impact number this year over last year, just so we can kind of get a sense of how, you know, how much better regionals would have been aside from those headwinds and tailwinds?

I would say it would have been in excess of 10 million when you add all of those up. Leap year in Vegas was another six.

Okay, that's really helpful. And then over in Las Vegas, impressive margin performance year over year. I was hoping, and you kind of touched on this in the prepared marks, if you could just unpack where you're finding those cost savings, if there's anything one time in there, and how should we think about those things as we roll through the rest of the year, or if there are gonna be additional sort of tailwinds on the cost side?

Yeah, I'd just say the team does an outstanding job looking at every vertical, every piece of the business, whether it's in our labor efficiencies, whether it's in our food and beverage outlets, whether it's on price or product negotiations with our vendors, the team does an outstanding job in this market and across the country in driving efficiencies wherever we can while maintaining exceptional guest experience.

And keep in mind, Brent, we were heavy rotation in terms of F and B additions, really over the last four to six quarters. And as you get to where you're anniversarying those, you open up typically at higher staffing, lower margins than you are a year later. And some of it's that as well.

Okay, great, thanks, helpful guys.

Our next question comes from Steven Wysinski with Stiefel.

Yeah, hey guys, good afternoon. So Tom, you might get angry if I ask this question, but I'm gonna, you talked about how you haven't seen any changes in customer behaviors, but I'm gonna try to ask a question anyway, and then you can tell me no. But if we think about your database, I would assume your higher end players are holding up pretty well. But if we think about that lower end customer, non-rated play customer, have you seen any changes in their behaviors or slowing of your database customers on the lower tiers? Any changes in non-gaming spend in regional markets? Just trying to cover all of those bases to make sure we aren't missing anything.

Yeah, no, I understand where you're coming from. There's nowhere I can parse it where it's a different story. I would tell you as we've talked about before, since the stimulus checks rolled through the system, unrated play has been softer than rated play. But if you look at, in April, rated play across the enterprise for us is up mid single digits. Unrated play is a little softer. So it's a pretty good story. I think that we all live in a world where what's happening in the stock market and on CNBC is the echo chamber we live in. I think that the bulk of our customers, the bulk of US consumers are not stock owners. What they see right now is gas prices are lower. People on CNBC are frightened. Rich people are losing money. That is not a terrible combination for them. Now, if we get to later in the year and you're seeing real impacts macroeconomically, obviously we would not be immune to that, but our customers feel good. I was talking to Anthony before we started. I feel better about the way the business is going right now than I did at any point in 24. And I felt pretty good in 24. Now, I'm not foolish. I know that that can change given what's happening on a macro basis, but we are not directly impacted by tariffs hardly at all. Obviously, we have managed COGS through a pretty brutal inflation environment over the past three and a half years. So we feel very good and we're watching the broader macro shifts the same way that you are. We just can't see it in our business

yet. And all those comments are through real time, through April, meaning regional. Yeah, I have numbers through

today's Tuesday. I've got numbers through Sunday.

Okay, fair enough. And then one more question if I could, Tom. I think if I remember correctly, you guys still own about 60% of your real estate in Vegas and I think it's like 50% in your regional markets. So I guess my question is, if there was some kind of change in the macro environment that really starts to impact you, is that something that you guys could leverage in order to keep your balance sheet in a pretty leverage neutral position versus having that debt ratio move or leverage ratio move higher? Hopefully that makes sense.

Sort of, it makes sense. So we have a piece of our business that at consensus is growing 200 and something million dollars year over year in EBITDA, which we're certainly comfortable with. I don't anticipate that business will be impacted much at all. So you're talking about really brick and mortar business and you and I have been through enough of these, call it normal business cycle recessions versus a GFC. And what you get is you get some softness in destination markets and you get some substitution into local markets and with digital growing next to that and our free cashflow position dramatically improved in terms of where capital spending was. I feel very, very good about balance sheet now going forward into an economic, a period of economic softness. I really like our position.

Okay, perfect. Thanks, Tom, appreciate it.

Our next question comes from David Katz with Jeffreys.

Hi, evening, thanks for taking my questions. So I wanted to just talk about the digital side and the split between iGaming and sports betting and how you're thinking about those two progressing forward as we get toward this end of the year. You know, sports betting has been, I guess, a bit more of a challenge whereas iGaming has maybe been a bit more natural. Help me characterize that.

Well, I'd say we do more e-bidding sports betting than we do in iGaming as we sit here today. We do on a per state basis, iGaming looks great. There's not a lot of jurisdictions right now. So I kind of, you know, sports betting is going to generate you know, hundreds of millions of EBITDA for us in the next 18 months. If you're looking through end of 26 as well, iGaming, you know, if you want to talk about my own views, I think that the, you know, what we're seeing in terms of state moves on tax rates in sports betting is kind of symptomatic of states are now on their own. They had to spend, they had to commit spending the American Rescue Plan funds from the federal government by the end of last year. So for all intents and purposes, that money is gone and they're on their own. So I don't, I'm not surprised at all that they start to look to gaming. So I think that's going to put us in a cycle of iGaming legislation in 26 and 27 is going to start to look more appealing to some jurisdictions that are looking to plug holes. You know, I think that in terms of the business, the volatility that you have seen in sports outcomes the last two quarters shouldn't be surprising. You know, we compare, we talk about hold percentages with the precision that we do in the brick and mortar business. But the reality is in sports, there's 270 something NFL games. There's less than a hundred games in the NCAA tournament you're dealing with. Small sample sizes, you're dealing with correlated outcomes as you get into parlay betting. So the volatility of hold in sports betting is going to remain. Now we've seen two quarters in a row where that worked against us as a sector. You're going to have quarters where that works for us. But I think over time, the steadiness of the hold and the growth in the high casino piece is going to become increasingly appealing to investors. And that puts very well with where our strengths lie in terms of, you know, I don't want to, I said in the beginning, you're doing very well in sports betting, you'll generate hundreds of millions of EBITDA, but iGaming is an even better area for us given our database. So I agree with that premise. And I think we're heading to a period of time with state budgets and with, you know, where investors are going to go, where that's going to be a popular place to be.

Understood, appreciate that. And if I may follow up quickly, I just want to confirm, you know, one other dynamic because I know we've talked about Las Vegas a little bit. Just confirming that, you know, as we progressed into the second quarter, specifically April so far, that Las Vegas, you know, trends are moving in a positive direction.

Yeah, April looks like the first quarter across the board, every segment.

Perfect, thank you.

Our next question comes from Barry Jonas with Truist.

Hey guys, Tom, any updated thoughts you can share on spinning digital? Sounds like operating trends are extremely strong, but not sure how market conditions are factoring in right now, thanks.

Yeah, as I said on the last call, our job is to deliver the numbers that we have laid, that we laid out starting in 21. We're well on that path. The goals are, you know, in our windshield now as we approach them. And, you know, we'll see where we're at when we get there in terms of are we getting value for what we've created? And, you know, if the answer is, you know, we've hit our goals and we're moving through them and we're just not seeing any in the equity, again, I'll tell you, we will look at any and all options to create value for shareholders. But we are mindful that the first thing we need to do is continue to deliver the numbers on the path that we have.

Got it, and just to follow up, you know, I'm curious to get your thoughts on like, Kal-She, PolyMarkets of the world, and how maybe that contract prediction business is impacting your sports betting business. And is it something that you would consider adding as a product, thanks.

So we don't, there's zero impact so far in that business for us. You are, your opinion is as good as mine in terms of what's going to happen. If there are ways to drive more EBITDA through our business that open up through legislation or regulation, then you should assume that we're going to look to how we can take advantage of those opportunities to the greatest extent possible for our shareholders.

Got it,

thank

you,

Tom. Our next question comes from Sean Kelly with Bank of America.

Hi, good afternoon, everyone. Thanks for taking my question. Couple for Eric, if I could. So Eric, you know, I think the big debate in, you know, the online sphere is really about handle growth, especially on the OSB side. And just would love to start with your observations there in terms of kind of what you see of overall levels. Obviously, I think idiosyncratically, you're, you know, re-prioritizing maybe that business a little bit, your own handle growth down. But I'm more interested at the macro level. Do you think you're seeing a broader slowdown and kind of core trend as you look or evaluate the business or how are you kind of framing, you know, the organic growth on the OSB side? That'd be helpful.

Yeah, sure, Sean. You know, as we've mentioned the kind of prior couple quarters, we've reduced our reinvestment levels at the extremely low end customer where we were unprofitable. And then we've reduced also at the extremely high end of the database. And that's where you're seeing the general declines in volume in aggregate across our business. If you look at the other segments of the business which are kind of in the middle where you've got, you know, somewhat more recreational players, some fairly large players, but not astronomically high wagers, that business is solid, it's growing. In our case, it's growing, you know, high single digits, low double digits, depending on which segments and which states you're looking at. So I would characterize it as very solid at this point. You know, there's just a lot of noise out there which I think is what a lot of people are seeing. You know, for example, North Carolina launch, we're lapping that. You've got some other events happening. You'll have the Olympics annualization this summer. So there are some different things that are going on. But broadly speaking, I think it's still solid. Maybe it's not at the 30% level that we were seeing as you had just continually new states opening. But from our perspective, it's still a solid growth business. And at the same time, you'll see our hold slowly creep up as we get the parlay mix higher. And so you do get a compounding effect with, you know, higher volume growth and higher hold growth.

Yeah, Sean, I would, I'd just say this should be what you're expecting when there are not new states. You should expect, and I'm talking industry-wide. So handle growth should decline when there are not new states. I think investors should want operators to become more, to become better and more efficient at marketing to the right customers. And that's ultimately going to lead to the profitability numbers that I see out there in reports. I don't see a scenario where you can hit those numbers with handle growth where it was and promo where it was. That has to rationalize and you're seeing that happen. And part of the effect of that is unprofitable customers are not gonna be placing bets and you're gonna see handle growth not quite as spectacular as when there were a bunch of new states. I don't see anything happening that should be unexpected. Regardless of, I understand that different investors invest for different reasons and like super high growth rates in terms of driving profitability of this business as an industry, this should be what you expect to happen.

Thank you very much.

Our next question comes from John Decree with CBRE.

Hi everyone. One question on digital to start. So I think that remarks mentioned that April, I casino was up maybe 70% on top of 50% last year. So I wanted to confirm if that was GGR and then if you could speak to that a little bit what are you describing the acceleration in April specifically and if you expect that trajectory to continue for two Q if there was something kind of one time against the comp.

That's NGR John, I really don't care what GGR is. And in terms of what's driving it, is this the same, Eric can talk about what we're doing in iGaming that's moving it?

Yeah, it's similar to prior quarters where we continue to enhance the app. We're very excited about launching our first in-house designed game. What we found is that the branded and exclusive content really drives action from our customers in addition to having a better cost profile. And so as we roll out these internally designed games, we'll expect to see that. The, as I mentioned, the Caesar's Palace app continues to be our fastest grower and our largest app. The Horseshoe app is accelerating now, which is nice to see. And so it's just basic blocking and tackling. We are improving our CRM capabilities. We've mentioned this for the last few quarters with respect to having OptiMove in there. That as we continue to push more campaigns through OptiMove allows us to do better and better segmentation and then have less leakage in terms of reinvestment into segments where we're not getting a return. And so when Tom mentions the NGR growth, and you can see it in our numbers from this quarter, our GGR growth wasn't as high as our NGR growth because we're actually reducing our promo expense as we're growing at those high levels. So it's a virtuous circle that we're currently in. And there's no reason to believe that the 50% growth trend for the year doesn't continue.

Thanks, Eric, I appreciate that. And Tom, maybe one on Las Vegas, you've given us a lot of color about what you're seeing, but maybe specifically customer segment, international, travel, there's been some numbers and a lot of talk about decreasing international demand to the US broadly, whether it's political or a stronger dollar. So could you help us understand how much exposure you have, I guess in Las Vegas or destination marks, if it's relevant in some of your regional destinations, but how much exposure to international customers, either room nights or even dog and whatever you can provide that you have. And if you've seen anything, any slowdown at all in that business for you.

So we're primarily a domestic business. We have some international high end play that has continued, no change in that cohort for us. Canada for us is something like three or 4% of Las Vegas. We have certainly seen reduction in Canadian visitation, but have been able to, again, we're a 97, 98% occupancy business. So at that level, you were turning away others. We've been able to replace that business, but that's the only one that I'd call out that's been visible to us. We see the rhetoric elsewhere, but it's Canadians that have been visible.

I understand, I appreciate that. Thanks, Tom.

Our next question comes from Chad Bainan with Macquarie.

Afternoon, thanks for taking my question. I wanted to ask about regional margins, a little bit of noise, positive noise with Danville and New Orleans benefiting revenues in EBITDA. In Q1, year over year margins were about flat, so that would kind of imply that the same store margin on the rest of the portfolio was down. Wondering if you could help us with that bridge, and then more importantly, as we look forward, Tom, I know you gave rough outlook for regionals, but could we actually see margins ramp up as Danville and New Orleans continue to ramp here? Thank you.

Yeah, so what you're describing as you parse margins is what I've talked about for a couple of quarters now, that the addition of Danville and New Orleans is offsetting competitive pressures in a number of our properties that would see it both from a revenue and margin perspective, and the net result is we're growing the segment. Virginia margins have held up significantly better than we were anticipating when we moved from the temporary to the permanent, but as you anniversary more of the competitive impacts in the regional assets, I would expect both overall EBITDA improves and margins improve, and if you think about by the end of this year, we'll be faced with one more Penn-Illinois move, I can't recall if it's Aurora or Joliet that happens in early 26, but all of the competition we've been talking about will be in our rearview mirror, and most of it will have been anniversaries, so we think regional continues to get better from here.

Okay, thank you. And then with the buyback, how should we think about how opportunistic or how active you are in the market? You talked about the WSOP node and just the cash that's available, we can see your CapEx guide, make an assumption for cage cash, but how much more flexibility do you have this year on the buyback?

I would say if the stock dislocates as it did in early April, you should expect us to remain active throughout 25.

Great, thank you very much.

Our next question comes from Jordan Bender with CitizensJMP.

Good afternoon, everyone. Tom, I appreciate the color on the alloc and the levers if we do see consumer weakness in the prepared remarks, but if we can isolate Las Vegas, I don't wanna hold you to a number, but how should we think about negative operating leverage and the cost levers you have to pull there in the event that we do go into some sort of downturn?

Yeah, we've got the lever in terms of filling our rooms that I've discussed. We've operated now through COVID, this portfolio, and so we know that in a particularly dire economic condition, you can be aggressive with hours of operation, days open of non-gaming pieces that help you to manage that, but keep in mind in Vegas, these are giant buildings, so they operate their best and at their best margins when they're full or close to full, and so that's the key piece for us. How do we manage that if and when demand softens, which again, we have not seen today?

Okay, and Eric, on my follow-up, if my math is correct, structural hold in the last several quarters has been in the low eights, so taking that, can you kind of bridge this from a timing standpoint of when we can get from a low 8% hold to your 10% long-term target? Thank you.

Yeah, it's tough to say with a huge amount of precision because it really requires us to make some changes on the tech and the trading side, and the reason I say that is, for example, right now we can't do player prop cash-outs on our app. We have the ability to price it, and we launched it, but we have a bottleneck with one aspect of our tech stack, and so we're removing that bottleneck, and later in a few months, we'll be able to re-enable the SGP cash-outs, player props cash-outs, sorry, and so that'll, as a result, improve our hold because it'll allow us to offer more cash-outs at a higher margin, and so there are a number of those things on our list. I would estimate that we would get to that 10% hold probably at the back part of next year. I think given the roadmap that we have and the execution timelines that it takes to push all these things through, that's probably a reasonable timeline, but we're obviously trying to get there as quickly as possible, and it'll also depend on customer behavior. We do find that more and more customers are enjoying making the SGPs and the player prop wagers, and so as long as that continues to trend in the right direction, it could be sooner than that.

Great, thanks everyone.

Our next question comes from Daniel Luglielmo with Capital One.

Hi everyone, thank you for taking my questions. In Las Vegas for March and then any numbers you have for April, have there been any changes in the overall spend per customer versus last year? You mentioned that the everyday domestic consumer is probably in a better spot than the news flow would indicate, so I'm just curious if we see people coming in and spending more

in Vegas. Yeah, Danny, we've not seen any change. In consumer spending patterns in our business today, I'm fully aware of what's happening on the broader stage and if and when we see any impacts from that, we will certainly communicate that.

Okay, that's helpful, thank you. And then the expected capex spend for 25 stay pretty consistent with prior quarter. Are there anything, is there anything around like the supply chain that you guys are watching or is that all pretty buttoned up for the projects that you're working through this year?

Yep, no impact

to the capex guidance. Our

next question comes from the line of Stephen Grambling with Morgan Stanley.

Hey, thanks, and this is, I guess, a question for maybe both Tom and Eric. Tom, I think you've said that the volatility in the sports betting hold and then therefore even dies is kind of like a feature, not a bug, and so we should expect that to continue, but what are some of the things that you can do or that you are doing to improve kind of the odd setting and maybe should we anticipate that the upper and lower bound on that should narrow in the future? So

I'd say within a season, no, but obviously as the numbers get bigger, you're gonna be more toward your true odds, but my point is when you make a blackjack better, we calculate hold in blackjack or baccarat, that's over millions of outcomes and pretty certain. You know, when you're setting sports lines and we're all getting better at it, there's a human element in every piece, from setting the line to the players know when the commanders and eagles play in the playoffs, they've already played each other twice. The players know that, the odds makers know that, the bettors know that, that all impacts the precision of those odds and the fact is your customers, the general public bets favorites and they bet overs and you cannot move the lines to the point where you're going to change that on a broader basis and the things that we like about the business in terms of the parlay percentage going up across the industry with us not being an exception is increasing hold, but as parlay percentage goes up and the general public bets the favorites and the over, when favorites and over congregate in terms of sports outcomes, that's gonna be negative and the reverse is gonna be positive, that's not going to change.

And the only thing I'd add to that, Steven, is if you look at our first quarter results, we did report hold improvement year over year despite the bad outcomes in the NCAA and that's made up because we're doing a better job with tennis, with soccer, with other sports like that and so I do think you'll see the average hold continue to rise, but to Tom's point, you're gonna continue as more and more people that parlay to see volatility as well.

Got it, makes sense and maybe one other follow up to some omni-channel, I guess maybe I missed this in some of the opening remarks, but are there any major initiatives that you have to try to bolster and not just digital separately or thinking about the brick and mortar sports betting, but thinking about it holistically or from an omni-channel standpoint or is there any way that you think about the synergies that you get from the combined efforts today?

Yeah, we've got a great group of hosts and player development, team members across the country that have been brick and mortar hosts for a while now, have great relationships with players. We have a program in place to incentivize them to get sports and online casino customers into Caesar's Rewards and onto our app. And we also have a great group of online hosts that do the same, but also get those online customers to come and use their rewards and experience the great assets that we have on the brick and mortar side of the Vegas of the business, whether it be in Vegas or elsewhere. We're also, we have large events for very good players and whether it be Super Bowl or whether it be other events, those are events that are now being attended by not only our best brick and mortar customers, but also our best digital customers as well.

And you saw, we put out an announcement a couple weeks ago about a relationship that we did with AGS as an example, because we do buy so many slot machines and buy them as a group, we're gonna launch a product at the brick and mortar facilities and online at the same time. And that is a pretty unique component for our customers that we're able to offer.

Great, thank you.

That concludes today's question and answer session. I'd like to turn the call back to Tom Reig for closing remarks.

Thanks everybody, we'll talk to you in July when we release second quarter.

This concludes today's conference call. Thank you for participating. You may now disconnect.