BALY - NYSE

Good morning and welcome to the Bally’s First 2021 Earnings Conference Call. All participants’ lines have been placed in listen-only mode to prevent any backgrounds noise. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] I will now turn the call over to Craig Eaton, Executive Vice President and General Counsel. Please go ahead.

Good morning, everyone and thank you for joining us on today’s call. By now, you should have received a copy of our Q1 earnings release, which we issued earlier this morning. If you haven’t, the earnings release and presentation that accompanies this call are available in the Investor Relations section of our website at www.ballys.com under the News and Events and Presentations tabs. With me on today’s call are George Papanier, his I our President and Chief Executive Officer; Steve Capp, our Chief Financial Officer; Phil Juliano, our Executive Vice President, Casino Operations and Chief Marketing Officer and Adi Dhandhania, our Senior Vice President of Strategic and Interactive. Before we begin, we would like to remind everyone that comments made by management today will contain forward-looking statements. These forward-looking statements include plans, expectations, estimates and projections that involve significant risks and uncertainties. These risks are discussed in the company’s earnings release and SEC filings. Actual results may differ materially from the results discussed in these forward-looking statements. In addition, during today’s call, management will refer to certain non-GAAP financial measures. Reconciliations to the most comparable GAAP financial measures are included in the schedules contained in our earnings release. We do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project special charges within certain expenses. Today’s call is also being broadcast live on our investor site and will be available for replay shortly after the completion of this call. I’ll now turn the call over to George. George?

Thanks, Good morning, everyone and thanks very much for joining us on a Monday morning. We're extremely excited to take this time to recap a very successful first quarter and provide some additional color on several recent announcements that we've made. I'd like to begin by addressing the significant progress being made in response to the COVID-19 pandemic. We're encouraged by the rate and effectiveness of vaccinations, as well as with the loosening of capacity restrictions and other COVID-19 protocols. We're very much looking forward to continue to safely welcome back our loyal patrons for properties across the country. I’ll also like to take a moment to highlight the incredible efforts of our more than 6000 outstanding employees, have gone above and beyond over the past year to help us not just weather the impact of the pandemic, but to truly thrive and grow as a company despite a challenging operating environment. We greatly appreciate their efforts which serve as the foundation of our success. As reopening process continues to progress across our brick and mortar locations, we are approaching historical operating levels and we're confident that we'll continue to benefit from a strong rebound in demand. Now turning to our first quarter results, the first quarter results reflected encouraging performance as the momentum that began in the third quarter last year, which was temporarily slowed by second wave of COVID restrictions in Q4 to gain traction. So much so that we achieve record adjusted EBITDA of over $50 million for the quarter. Black [ph] positions closed in 2020 helped drive positive results, it is important to note that same store property level EBITDA exceeded our first quarter 2020 performance by more than 80%. We're also pleased to report that adjusted EBITDA margins for the quarter were 27.2%, representing an increase of 708 basis points over the same period last year. Excluding the dilutive impact from $6.5 million in negative adjusted EBITDA at Bally's Atlantic City, EBITDA margins were 35.4% more than a 1500 basis point improvement from the first quarter of 2020. The 280 basis point improvement from the strong margins we saw in Q3 2020. At the segment level, Southeast segment recorded revenue of $64.6 million, up 153% and adjusted EBITDA of $26.4 million, an increase of approximately 400% from the same quarter last year. Once again from a same store perspective, Biloxi led a year-over-year improvement with EBITDA of $14.6 million for the quarter, an increase of 175%. Biloxi’s adjusted EBITDA margins continue to be extremely strong, with a margin of over 44% for the quarter compared to 21% in Q1 2020. In Rhode Island, we continue to benefit from the resumption of 24/7 operations in February, the loosening of some COVID restrictions, pent-up demand in the region, the positive customer response to our targeted marketing initiatives. Overall, adjusted EBITDA for Rhode Island was $24 million, up $5.4 million with 29% from the prior year. Adjusted EBIT margin for Rhode Island was also extremely strong in the quarter at 47%, which represents a 1437 basis point improvement over the same quarter 2020. In the West, Kansas City had a record Q1 and its second consecutive record breaking quarter, contributing over $8 million of adjusted EBITDA for the quarter with adjusted EBITDA margins of over 38%. During the quarter, we commenced work on our plan capital improvement projects at the property. Once completed, our new land-based facility, whilst [ph] all of our-non gaming activities and include branded restaurants, and sportsbook, and retail outlets, facility will also link to casinos existing parking structure to provide a stronger sense of arrival and a better customer service experience. The Mid Atlantic segment saw mixed results. Dover had the strongest adjusted EBITDA quarter since we took over the property with revenues of $22.7 million and adjusted EBITDA of $8.6 million, resulting EBITDA margin of 37.9% was up 2451 basis points in Q1 2020 and up 78 basis points from the Q3 2020 high of 37.2%. The other property in the Mid Atlantic segment, Bally's Atlantic City was a drag on quarterly results once again. Since the acquisition closed in late November, operations have been impacted by a combination of seasonality, year-over-year revenue impact due to COVID-19 restrictions and complex decoupling from the legacy Caesars IT systems, which was largely completed in mid-February. First quarter adjusted EBITDA at the property was negative $6.5 million in revenue $25.7 million. We note that Q1 and Q4 have been traditional loss making quarters for the property even without the complicated factors I mentioned above. However, wanted to close - however, wanted to close on the property as soon as possible so that we could take charge of the transformation and we believe these impacts have begun to dissipate and we see a path to profitability as we move into historically more profitable periods, in late Q2 and Q3. We also successfully opened our permanent sportsbook location within the Bally's Atlantic City property during the quarter, with our previously announced partnership with FanDuel and Just in time for March Madness. We're encouraged by early visitation by how the new sportsbook complements the property. This represents the fifth retail sportsbook that we have opened over the past couple of years and features a central 25-foot-wide state-of-the-art LED video wall flanked by two 10 foot wide led video walls, as well as 10 video displays, five betting windows and 20 self service betting kiosks. This is one of the many developments planned here. We are certainly transforming the property and making significant progress towards returning it to prominence in the Atlantic City Market. Turning to other capital expenditures. We continue to make progress on our $40 million redevelopment plan at Casino KC. We believe this project will greatly enhance the property and overall guest’s experience, driving growth and a solid return on our investment. The Casino KC project is largely a second half to 2021 event, which we intend to complete sometime in 2022. In Pennsylvania subject to regulatory approvals, we expect to begin construction on our State College, mini-casino development with local real estate and private equity investor Ira Lubert in the fourth quarter. We believe that construction will take approximately one year and cost approximately $120 million. As for Rhode Island, should the legislation approving our proposed joint venture with IGT pass, we're optimistic that it will by the end of June. We expect our Lincoln expansion project to take 18 months to mention as soon as practicable [ph] We expect to incur CapEx in both 2021 and 2022 as we make exciting updates to Twin River Casino and we'll provide more detail on IGT later on during this call. Now I'll turn to a few of our pending brick and mortar acquisitions. As we mentioned on our last call, we continue to expect that our previously announced acquisitions of the Tropicana Evansville and Jumer’s casino hotel will both close in the second quarter, likely in June, pending regulatory approvals. We're encouraged by the progress we're making with the various regulatory bodies. Both of these properties represent valuable additions to our growing national portfolio, and we're looking forward to welcoming them into the Bally's family. In addition, we recently announced an agreement to acquire the Tropicana Las Vegas casino from Gaming and Leisure Properties, Inc., an acquisition that is expected to be accretive to Bally shareholders long term. Notably, the transaction requires zero cash outlay from Bally's at closing. We expect that we will close sometime in early 2022. To go a level deeper, and as we mentioned when the transaction was announced, under the terms of the agreement Bally's will pay $150 million for the property's non-land assets. While we have agreed to lease the underlying land from GLPI for initial term of 50 years, and an annual rate of $10.5 million, subject to increase over time. Bally's and GLPI will also enter into a sale leaseback transaction related to our Black Hawk in Colorado, and Rock Island, Illinois; casino properties for cash purchase price of $150 million payable by GLPI. Lease will have initial annual fixed rent of $12 million subject to increase over time. The Las Vegas Strip is a preeminent destination visited by over 40 million players and guests each year. We're confident that this addition to our brick and mortar portfolio will significantly enhance our robust customer base, which includes more than 15 million connected customers and unlock additional marketing opportunities for us to leverage the iconic Bally's brands. Taking a step back to think through overall trends, strengthening customer confidence, limited entertainment options and our disciplined operating strategy all contributed to record results in many locations. Starting in February and excluding the impact of weather, business returned to level similar to those in the third quarter 2020 and March, where we made almost half of our EBITDA for the quarter, we began to benefit from even stronger improving trends, which have continued in April with a great momentum. We're encouraged by the increased visitation, as the vaccine rollout progresses. As we continue to safely welcome our customers back to our facilities, we believe we can return to pre-COVID levels in short order. One of these opportunities is in the 65 and over segment. We have seen strong rebound from this core Bally's group, particularly in the last couple of months, many are still on the sidelines. As our country continues to make headway against the pandemic, we're confident that more of these guests will return to our properties. In summary, we are encouraged by the opportunity for growth on the non-gaming side of the business. And we'll take a thoughtful approach in reintroducing these amenities. We remain committed to a disciplined operating strategy that has delivered outstanding results over the last several quarters. With that I'll turn it over to Adi to provide an update on our Interactive business. Adi?

Thanks, George. And good morning, everyone. Since our last call, we've outlined - we've continued to make excellent progress developing and diversifying our Interactive business. I'd like to begin with an update on the overall platform, starting with Bet.Works, that will serve as the anchor asset for the Bally's Interactive division and underpin our mobile sportsbook launches. While we're still awaiting regulatory approval for the acquisition, which we expect will occur next month, we are actively working towards officially launching our Bally Bet.Works sportsbook in our first market Colorado by the end of the month. In addition, the team is working on a roadmap for at least three additional state launches throughout the course of the year. While the focus this year would be to get our product launched with very limited marketing, it will allow us to test and deploy our new product features, along with media integrated across broadcast TV stations, and our recently rebranded Bally sports RSNs. Following these initial launches, we expect we will begin to layer in additional states throughout 2022, while positioning us well in key markets to take advantage of a full sports calendar. In addition to Bet.Works, we've been strategic and acquiring complementary platforms with recent additions of Monkey Knife Fight, the fastest growing daily fantasy sports platform in North America, and SportCaller, a leading global B2B free-to-play game provider. Monkey Knife Fight provides us with market leading fantasy sports content and a brand whose flair database will be developed and leveraged to support the launch of our Bet.Works [ph] platform. SportCaller will enable us to launch our own suite of free-to-play games this year for interactivity within the newly launched Bally sports app, and of Bally sports RSNs. These top of funnel opportunities will allow us to acquire new players at a significantly lower cost and engage with our existing database of players throughout the Bally’s ecosystem. Together with Sinclair, we are advancing our vision to change the paradigm of sports viewing by creating new and engaging learning [ph] experiences for sports fans across the country. The first step in the journey was the April 1 rebranding of Sinclair's 19 former Fox regional sports networks to Bally sports. Bally sports is the home of more than half of MLB NHL and NBA games in the US that's providing Bally's brand with tremendous exposure. The recent launch of the Bally sports app is part of the first phase of a major investment that Bally's sports is making into the expansive digital ecosystem designed to generate interest and engagement with fans throughout the day. The app provides continuous video content and other RSN programming, keeping fans coming back throughout the day and driving increased interest in upcoming games. We are pleased with the early reactions to Bally's sports launches and expect more exciting upgrades to these assets as we continue to gamify the sports we experience. Rebranding the RSNs was an integral part of our overall corporate rebranding initiative, and we continue to make progress to rebrand a brick and mortar properties under the Bally's name. We plan to provide greater detail on that process over the coming months as the rollout officially begins. We also recently announced a memorandum of understanding with Sinclair to collaborate on programming interactive content on the RSNs and Sinclair's other platforms, which includes the tennis channel and stadium assets. We will work together to facilitate the production and broadcast of Bally's produced content during non-game windows. We're confident that the engagement opportunities we will create will elevate the live viewing experience, as our interactive content gamification strategy continues to evolve. In addition to our partnership with Sinclair, we've also formed sports betting partnerships with MLB, NBA and NHL. These partnerships provide us with access to official league and team marks, logos and data. Access to these assets will enable us to enhance fan engagement with their favorite teams. Now let's turn to our recently announced combination with Gamesys. As we continue to work through the regulatory process in the UK, we remain limited in what we were able to disclose at this time. But we're extremely excited with the acquisitions potential. Gamesys is a leading, global online gaming operator with number one provider of bingo and casino games in the UK. By bringing together Gamesys has proven technology platform alongside its highly respected and experienced management team, combined with the US market access that value provides, we will be well positioned to capitalize on the significant growth opportunities in the US sports betting and iGaming marketplace. We firmly believe that the combination has a compelling strategic and financial rationale and will result in long term value creation. We were excited to be able to speak with investors and analysts about the announcement during our recent equity offering roadshow and we look forward to providing additional details about the combination over the coming months. Finally, I would like to provide a brief update on the status of our proposed joint venture with IGT. As was announced last week, there have been updates made to the enabling legislation in Rhode Island. And we're optimistic given the support of the legislature and governor that it will pass this quarter. We expect this legislation will be accretive to us and position us to compete more effectively in the region, as we feel it will provide us with state of the art VLTs and a mechanism for ensuring that we maintain a competitive slot flow well into the future. The extended term associated with the legislation also gives us a horizon we need to support additional investment in our facility and amenities and would deliver a positive financial return for our shareholders, even before taking into account any improved performance driven by enhanced product offering. The proposed legislation would lock in a table game and VLT tax rates, cement marketing reimbursement dollars, and allow for greater flexibility in the use of promotional credits to 2043. Further, it would also result in favorable changes to our regulatory agreement in Rhode Island, including an increase in the maximum leverage ratio to 5.5 times and greater flexibility of sale leaseback transactions relating to Rhode Island assets. I will now turn it over to Steve. Steve?

Thanks, Adi. I want to start with a quick update on our cash and liquidity. We ended the quarter with cash on hand of right about $150 million. We did recently increase our revolver from $250 million to $325 million, and at the end of the quarter we had $75 million funded under the revolver, the remaining availability is $250 million. That gives us total liquidity of just over $400 million. In addition, we generated cash flow from operations a little over $25 million in the quarter. On the CapEx front. Our approach to maintenance and growth capital investment will continue to be focused and disciplined. For Q1 total CapEx invested was $50 million [ph] of which $7 million was maintenance. That non-maintenance amount the $8 million included just over $4 million of Hurricane damage rebuild at Biloxi, which was covered by insurance proceeds received. On April 20th, we completed our public equity offering of 12.65 million common shares at a price of $55 per share. Total shares issued included 1.6 5 million shares from the full exercise of an over allotment option, proceeds from this offering net of the underwriting discount was $671 million. In addition to that equity raise, we also announced a sale of 909,000 warrants to Sinclair broadcasting for $50 million. We have applied the net proceeds from these equity raises to pre-fund our anticipated combination with Gamesys. With regards to that combination, and as we've said along the way, we intend to maintain optionality as it relates to the ultimate sources of funding and closing capital structure. As part of this process, we continue to discuss a private offering of equity linked securities with a potential strategic investor who made an unsolicited offer some weeks ago. Bear in mind, moderate leverage and abundant liquidity have enabled us to be opportunistic and acquiring assets, securing related financing and growing the company. And so we won't be changing course on those priorities moving forward with Gamesys. As George mentioned, we also announced the expansion of our relationship with GLPI, through the proposed acquisition of the Tropicana Las Vegas. This is our second transaction with GLPI. And once completed, will result in five of our properties being leased from GLPI. While we do remain committed to outright ownership of a good portion of our real estate portfolio, this transaction is another example of our continuing to execute on an opportunistic basis. And of course, we're acquiring an asset on the strip in a debt-free manner with no cash out of pocket. Another recently announced M&A comp new to strip suggests our transaction is a good one. And with that, I'll turn it back to George.

Thanks, Steve. Well, that concludes our prepared remarks for this morning. I will now ask the operator to open it up for questions.

Thank you. [Operator Instructions] Our first question comes from the line of John DeCree of Union Gaming.

Thanks for taking my questions. I had one on Gamesys to start. I think in the prepared remarks, you've discussed possibly getting Bet.Works up and going sooner than perhaps closing. And given the Gamesys is a B2B provider licensed in New Jersey, not sure how UK takeover laws would affect your launch. But could they get started and getting licensed in some of your other states? And could you get started as a B2B relationship in making some progress on the iGaming front as well?

Sure. Adi, why don't you take that?

Sure. Hey, John, thanks for the question. So yeah, look, we are working with our colleagues at Gamesys. They're already licensed, as you mentioned in New Jersey. New Jersey is on our roadmap for states we will be launching and we really looking to partner with them for a launch in New Jersey.

Is there any other states that you could get started on or would the focus just be - just be New Jersey for now?

This is Craig Eaton. Hi, John. Short answer is, no. The transaction needs to be approved regulatorily in multiple states. Obviously Gamesys could on their own get an approval, but we're in that, you know, we're in that transaction phase right now. That being said, we hope to close this strip. We're aggressively pursuing this transaction close.

That's helpful, clarity. And maybe one for Steve, on the financing package, as you kind of rounded out the prepared remarks and talk about your flexibility. You know, we've kind of gotten a lot of questions over the last couple of weeks, as to what that flexibility might look like. And, you know, we see your kind of cash flow generation are model through the back half of the year, as well as Gamesys. So I was wondering if you could help give us a little color on how some of that flexibility might play out in terms of financing, you obviously have GLPI in your back pocket and a possible strategic investor. But as you think about some of the levers that you have to pull between now and potentially closing? That might be helpful.

Yeah. John, look, as you know, we're under 2.7 disclosure rules under UK Takeover Code, we can't go into a whole lot. I can tell you we continue to emphasize the optionality moving forward. Look, there are a lot of moving variables, right, including and the closing date LTM EBITDA. Our business is, as George commented, specifically, in March, but even for the whole quarter of Q1 and continuing into, you know, through April, our businesses is rebounding with considerable strength. Gamesys has reported recent results of similar strength. So the denominator in the cash flow leverage equation is an important piece of the puzzle, right? Because at the closing date that LTM EBITDA will dictate how much leverage we are willing to put on the company. Also cash flow - free cash flow generation, which is a function of that same denominator of LTM EBITDA will be important from sources of funding perspective as well. Look, as well, John, Adi commented about the IGT deal. Well, the IGT deal if it gets passed in Rhode Island, did provide more flexibility to us and our capital structure at the closing date of Gamesys as well. So, you know, the variables floating around are numerous. And that's why we've been talking about optionality. Look, the good news is, the credit markets remain very strong. And we'll need those to consummate the acquisition. And so we're keeping a very close eye there as well. But look, John, it'll be up to about optionality for us and getting the right capital structure with moderate leverage, which we've always maintained. And that'll be our focus, as we look to close the transaction.

Thanks, Steve. Optionality is good. And get the tough ones out early. I'll hop back in the queue. Thanks, everyone.

Thanks, John. Appreciate it.

Thanks, John.

Your next question comes from a line of David Katz of Jefferies.

Hi. This is Cassandra [ph] asking on behalf of David. So I know that there are other things that you would probably need to get market access to, how do kind of balance acquiring properties versus taking ownership.

So I missed the last part. Hi, Cassandra, I missed the last part of your questions.

So in terms of gaining more in market access to state, how do you balance acquiring properties or seeking kind of strategic partnerships with existing operators there?

Sure. So this is more along the lines of sports betting and iGaming. So Adi, I'm going to pass it over to you and talk a little bit about not only kind of relationships, but also, you know, we're looking to enter states right now that have more of an open process, and not necessarily related to access. So we're taking advantage of that as well. But Adi, I turn it over to you?

Cassandra, thank you for the question. Yes, look, we're actively looking at states and regulations as they evolve and legislation as it evolves in different states. As you may have noted, we were able to secure market access both in Virginia and Iowa, two states where we don't have physical casino properties, and a wave of new states are enacting legislation as we speak. And lot of what we're noticing is, states are not tethering these skins and they're open for folks to apply. And we are in those discussions and conversations and monitoring it very closely. Our goal is to get into as many states as possible, and we're aggressively working on that.

Got it. Appreciate it. And if I may add another one. So in terms of cost of customer acquisitions, we've heard other operators provide like various some data points indicating where they are, some like, between like 102 to 600, we've heard. Where do you think you fall on that spectrum?

So I'm going to pass this over to Adi. But I'll just I'll just comment that we have because of the significant portfolio regional assets, we have 50 million people in our database. So the conversion rate of those customers we feel will be a lot less, But I’ll turn the rest of that over to Adi.

Sure. Cassandra, look, we've talked about this at length that we have built very significant top of funnel opportunities. We obviously haven't launched yet, so we don't have explicit guidance as to what the numbers are or will be just yet. But everything we've amassed today from our free-to-play offering to DFS, ultimately converting to our Bally's bet sports betting platform positions us well to have a lower customer acquisition cost and will be seen in the industry, along with the point that George just made around the conversion and cross selling of the casino database. In addition to this, I think it's important to know that our reach through Sinclair and all the different assets they have, both on broadcast TV side, the RSM side, along with the tennis channel stadium and Stir [ph] the OTT platforms, position us extremely well in the marketplace to capture different segments of the population, and target them as we think about customer acquisition in the markets we launch.

Great, thank you very much.

Your next question comes from the line of Barry Jonas of Truist Securities.

Good morning. This is actually Matt Cole [ph] in for Barry. Thanks for taking the question. The two quick ones. Given all the recent deals, how are you guys thinking about for M&A here? Is this more of a focus on land, interactive or anything else you would highlight at this point?

Sure, I'll take that. Well, obviously, we've been very active. We'll continue to be opportunistic. But we're also going to be disciplined as we've been historically. We have a track record of acquiring pro forma of sub seven times multiples, and we're going to continue to look for assets that we feel have upside, as well as give us access to sports betting and potentially iGaming markets. And as Adi mentioned earlier, you know, assets that compliment or sports gaming, or sports betting and iGaming initiatives like Bally fantasy sports and free to play acquisitions, which we just closed on.

And then I had follow up here, just you know, beyond the just branding side of it, I think about how you expect to integrate sports betting or iGaming with a sports watching experience? And how do we think about the key differentiators?

Sure. Adi, do you want to take that?

Sure. So look, just outside of branding, I think it's important that we think about the integrations we get. So if you look at what we announced with Sinclair recently to our MOU, we also have the ability to program non-game windows with content that we think would cross sell well, and or help create our brand when it relates to our sports betting product or any product that the Bally's ecosystem would have. But even with our current deal, we have exclusive rights to the integrations on the RSNs where we have market access, and those integrations from free-game, in-game, post-game, branding, et cetera, that allow us to target our audience with new content offering that helps us gamify the content and keep them coming back and have them stay engaged with us.

That’s it. helpful. Thank you.

Thanks, Matt.

[Operator Instructions] Your next question comes from line of Jeff Stantial of Stifel.

Hey, this actually Jackson Gibb on for Jeff Stantial. Thanks for taking my questions. I wanted to start on the brick and mortar side of the business. I think what everybody's kind of trying to figure out this quarter is how much of the strengths being witnessed in March and April, are truly sustainable versus one-time, given the environment. You called out lack of alternative, entertainment options in the release. But you know, there's also stimulus out there and pent up demand. How do you guys view consumer behavior shifting as we get into the second half of the year? And on the cost side of the business? What do you feel most confident can stay out versus what you would you - what we should expect to come back in? As things sort of normalize a bit?

Sure, I'll take that. Hey, Jackson. So you know, we're certainly benefiting from providing an environment in which your customer feels safe. There's still, as you said, limited amount of entertainment options. But we view it long term that we're going to benefit from the specific considerable exposure that we're getting to a younger demographic, that really, from our perspective, realizes that our facilities - our facilities really provide a lot of entertainment options - a lot of entertainment options. You know, and you had mentioned, and what we're starting to see now, that's even fueling this growth that we're starting to see a return of our older demographic, I'd mentioned earlier, 65 and older, well, that's still substantially less than what we've seen, historically. So we see a lot of upside still, from that perspective. As far as margins are concerned, we’re experiencing about 500 basis points improvement on historical levels, pre-COVID levels. And we really feel that, because we really, were forced to shut down, that allowed us to re-evaluate how we operate. And as we built back to the volumes of business that we're now seeing, we're able to do that more efficiently as a result of that, that we're seeing margins effectively starting to stick from our perspective. We're seeing that in labor. We're seeing that in some cases in marketing. So we think a good portion of this improvement will remain long term. And it just really depends on how other operators or our competitors really react from a marketing perspective. And hopefully, they had a lot, they learned as well as much as we did during this period. And we’ll be rational going forward.

Okay, great. That's super helpful. So for the follow up, I just wanted to switch gears to the online business. So as you think about the marketing and some of the development costs that it's going to take to get to a competitive level, market share here in the United States, should we expect the interaction - the interactive division to be EBITDA negative for significant period of time starting out? Or should we expect some of the more mature Gamesys international operations to compensate or sort of offset the ramp to profitability here in the United States? Just curious how you're thinking about the dynamic between those two?

I'll start and I'll pass it over to Adi. You know, as we said earlier, we're limited to what we can say as a result of the UK Code 2.7 disclosure. But I can tell you, aside from access to Europe, and associated free cash flow that Gamesys does now, it gives us a proven iGaming platform, which we feel is complimentary to our Bet.Works sports betting platform, and it's going to obviously put us in a lead position to capitalize on existing and future expansions of iGaming in the US. And we're looking forward to that. As far as – Adi why don’t you take the B2B from Bet.Works, as well as kind of give a little idea of how we're going to launch in the US.

Sure. Happy to do that. And thanks for the question. Look, I think, we would like to point you to is that we have been very thoughtful in our acquisition and building of the Interactive business. There are certain advantages we have that we think will help us reduce our reliance on heavy marketing spend compared to peers and competitors in the space. One being that we have our own market access in most states. We also have our own proprietary technology stack. And third, we have significant content and media footprint that gives us the impressions that we need to attract an audience. And more importantly, we have the ability to program content on the RSNs where there are millions of viewers today of sports - sports viewers today that we get engaged with and interact with through our content that we put on there.

Got you. All right. Thanks for the detail there. That's it for me.

Your next question comes from a line of Brett Andress of KeyBanc Capital Markets.

Hey. Good morning, guys.

Good morning, Brett.

In terms off the app - good morning. In terms of the app rollout, it still seems like we're going to get the four states by football season this year. But you mentioned additional states in the 2022. So maybe some more clarity on 2022. I mean, how many states could you get or are you targeting before, you know, the Superbowl or March Madness next year?

Adi, do you want to handle that?

Yeah. Thanks for the questions. Look, I think we talked about in our prepared remarks that we will be launching Colorado, which is a first market by the end of the month. We have a current roadmap for at least three more states this year. And we plan to, obviously launch those three states. And if possible, launch more states. Our goal this year, is to get our product out, get it tested with limited marketing, but more importantly, test the integrations that we get across broadcast TV stations, and RSN. So that would position us well, for 2022. So you should think about 2022, as a year where we have the full sports calendar. We would have multiple markets launched in ‘21, that we could expand upon in ‘22. And we would add additional states as either they open up or from our portfolio of market access that we currently hold.

Yeah, okay. Thank you for that clarity. And then just on Atlantic City, I think it did $6.5 of negative EBITDA in the quarter, is there any way to help us with how that property did in March and April, maybe so we can get some kind of better run rate there?

Sure, I'll handle that. So you know, obviously, we actually rushed to acquire this property [indiscernible] before 2020, 2021. So we closed on it kind of earlier than we probably should have, because it really is a seasonal business, in Atlantic City, but we wanted to get going with the integration of that property, as well as to - as well as the pursues sports betting and iGaming opportunities there. So, you know, we've – I mentioned the decoupling from the Caesars system, that through that TSA arrangement, there was probably the, one of the tougher transitions of a property that we have, everything else went really smoothly. So you know, we just - we needed to kind of roll out of that. And we just implemented our marketing calendar in mid February there. So we're now starting to see the benefits of that, particularly in March, and still is not the season until you really get into the summer season, the summer season there. So, we're looking to bring it to profitability in the second quarter, which was always our plan, which was really related to really starting to enter into the summer season. And then as you know, in that market, the third quarter is really where you make the majority of your free cash flow. We feel comfortable there. And I have still Giuliana [ph] who is on line, so if you want to add anything to that still from a marketing perspective, that may be helpful.

Thanks, George. Yeah, we see the momentum happening, the programs are maturing, the customers are responding. The capital is being prepared. We're telling the story about the capital that is to come and be finished, we'll open up a restaurant, which is a branded restaurant that we've Jerry Longo's Meatballs & Martinis will open that in about a week, followed by another restaurant in July, which will be a three meal restaurant up on sixth level. So those things have to happen. Customers need to see that. We'll start our – the renovations of our rooms, in August and some people would say why, why August? Well, because we - the sooner we get the rooms renovated, the better we'll do. And we're also enhancing our player development staff. We have some new priorities coming on board and new hires coming on board. And so I like the momentum. We're moving in the right direction. And we're also taking a deep dive into expenses and making sure that we find every opportunity to enhance the bottom line.

All right. Thanks, guys.

Your next question comes from the line of Lance Vitanza of Cowen.

Hi, good morning. This is Jonathan filling in for Lance. So my first question is, to what extent does the beam [ph] consensus estimates reflect the inclusion of properties and in the first quarter of ’21?

So, Steve, you want to handle that. I talked a little bit about same store and the improvement but the - but we added some properties in 2021 that were not comparable in 2020.

I actually missed the question. Would you…

Yeah, sure. So the - you know, to what extent is the consensus beating the consensus reflect the inclusion of properties that were acquired during the first quarter?

Well, I think I think consensus was inclusive, generally inclusive of those properties because just because we - that information was pretty well known. So we consider those to be one in the same, but look we - George commented this in his initial comments that the same store - the same store beat year-over-year was up 80% and consensus doesn't really break we're going to break that down if you will. So listen, the beat was significant on same store, the newly acquired properties holding into the portfolio have – that we just comment about Bally's AC, but across the portfolio even the brand new properties in the portfolio have ramped up nicely in this - you know as the vaccinations for COVID take hold and we have approach more of a stabilized post-COVID environment. We're seeing strength even in the new properties, some setting records in their all time performance. So strength across the portfolio of Bally's AC is the outlier at the moment. We've talked about that, but portfolio shaping up very well.

Got a. And a follow up from me, its just regarding the OST [ph] market [indiscernible] Like how should we look about with regards to the market share with Bally you know, like should it be like the big form owning 90% share and then Bally and others buying for the remaining or like how are you guys viewing the market share?

We certainly - I'm going to turn this over to Adi. If he want to give granular, I don't know that we do at this point in time. But we're certainly as you can see, you know, we've assembled the third largest portfolio of casino assets in the US. We own technology stack. We have the Bally's brand. We talked about the significant media relationship with Sinclair. It really the number one portfolio live sports rights that we recently added Bally fantasy sports and like the Monkey Knife Fight and free to play. And in Gamesys, is complete, as far as key technology and personnel. So we feel that we're extremely well positioned. And we're positioning ourselves to be a leader in that space.

And I'll echo what George just mentioned, look, we think that we will be a major player in the space. We are having similar conversations to the ones you pointed out. Obviously Arizona has an important market and he referenced the Diamondbacks. As you may know, in Arizona, we have three RSNs to the Sinclair relationship. All three of them are Bally sports branded, Bally sports, Arizona today. And we are looking into team relationships and partnerships, as legislation evolves, and skins are tethered to teams and are open. So in every market where there's an opportunity for us to partner with our Bally sports colleagues, we are partnering with them and are going direct based on what the legislation allows us to do.

Got it. Just the last one for me, before I get back to queue is, just once again the commentary about debating [ph] in Richmond, Virginia, we thought that you guys had done a tremendous amount of work, just kind of wondering, like, I guess get a sense of what happened there.

Well, we certainly are not in the minds of who the people on the committee. We entered into the process a little late. So we were a little disadvantage from that perspective. There's other parties that were on the ground a lot longer, particularly parties that are doing business in and around that market. But certainly, we felt we had the best economics for the city, as well as the state, we had the best location with the best infrastructure that can be felt to drive the most business to that market. And, you know, it just was, it was a decision that they made. And we're not going to get into the specifics of that. But, you know, we put our best foot forward and we felt really good about what we provided through the RFP process.

Thank you at this time, there are no further questions. I now turn the call George Papanier for any additional or closing comments.

Sure. Well, thank you, operator. You know, again, I wanted to thank you for joining us on today's call. And for what has been a very successful first quarter. And as we look forward to continuing this momentum into the second quarter.