Joe Jaffoni – Investor Relations Tim Wilmott – Chief Executive Officer Jay Snowden – Chief Operating Officer Saul Reibstein – Chief Financial Officer Carl Sottosanti – General Counsel.

Felicia Hendrix – Barclays Steve Wieczynski – Stifel Nicolaus David Katz – Telsey Group Carlo Santarelli – Deutsche Bank Steven Kent – Goldman Sachs Joe Greff – JPMorgan Thomas Allen – Morgan Stanley Brian Egger – Bloomberg Intelligence Chad Beynon – MacQuarrie.

Ladies and gentlemen thank you for standing by. Welcome to the Penn National Gaming First Quarter Results 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] As a reminder, this conference is being recorded today Thursday April 28, 2016 I would now like to turn the conference over to Joe Jaffoni, Investor Relations..

Thank you Nelson good morning and thank you everyone for joining Penn National Gaming, Inc. 2016 first quarter conference call. We'll get to management's presentation and comments momentarily as well as our questions and answers but first I will review the Safe Harbor disclosure.

In addition to historical statements or facts or statements of current condition today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which involved risks and uncertainties.

These statements can be identified by the use of forward-looking terminologies such as expects, believes, estimates, projects, intends, plans, seeks, may, will, should or anticipates or the negative or other variations of these or similar words or by discussion of future events, strategies, or risks and uncertainties, including future plans, strategies, performance, developments, acquisitions, capital expenditures, and operating results.

Such forward-looking statements reflect the company's current expectations and beliefs but are not guarantees of future performance. As such actual results may vary differ materially from expectations.

The risks and uncertainties associated with the forward-looking statements are described in today's news announcement and the company's filings with the Securities and Exchange Commission including the Company’s reports on form 10-K and 10-Q. Penn National assumes no obligation to publicly update or revise any forward-looking statements.

Today's call and webcast will include non-GAAP financial measures within the meaning of SEC Regulation G. When required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP can be found in today's press release as well as on the company's website.

Now to review the Company’s first quarter operating results is Company’s CEO, Tim Wilmott.

Tim?.

Thank you, Joe and good morning everyone who's on this call for first quarter 2016 earnings report. With me here in Wyomissing is Saul Reibstein our CFO, COO Jay Snowden, our Senior Vice President of Public Affairs Eric Schippers also on the line but not here in Wyomissing is our Chief Development Officer B.J.

Fair and our General Counsel Carl Sottosanti.

I'm going to make some brief introductory remarks and then Jay is going to talk about what we're seeing in our business in the first quarter and give you an update on Massachusetts and also our progress at Tropicana Las Vegas and I am sure of some other things and then Saul is going to follow Jay and talk about our guidance that we just put out in this release and give you some financial stats and talk about a couple of other things as well.

Let me start I am pleased to report a very solid first-quarter earnings.

We actually saw year-over-year a 15.5% increase in EBITDA just to remind everyone this year based on the opening of Plainridge in mid-part of 2015, the acquisitions of Prairie State Gaming in Illinois and also Tropicana Las Vegas those were some of the drivers of the year-over-year growth.

But also strength within our operation and I have to applaud our operating team driving improved margins in our businesses year-over-year in all three reporting segments. We also exceeded our guidance that we had put out in early February this year in the first quarter by almost 4.5%. So overall, a very solid first-quarter report from Penn National.

I did also want to provide an update on the expected opening of our Hollywood Casino at Jamal in San Diego County, we with the tribe secured a number of important County agreements recently and we now have a clear path to getting this property open in the summer of this year.

As of the end of the first quarter, we’ve spent about $210 million on this project. I know Saul is going to give an update on some of the financing opportunities that we are working on with Jamul as well. But overall a very solid first quarter.

And with that I will turn it over to Jay to give you a little bit more detail of what we're seeing in our operations..

Thanks, Tim. Our first quarter results were aided by our confluence of factors we obviously had milder winter weather in February and March year-over-year throughout the Midwest. We benefited from the extra day in February as well as an overall healthier consumer which is a more broad based comment.

We really had an exceptional quarter in both Ohio and Missouri where we saw same store sales growth of over 6% and we had terrific results in the Las Vegas locals market as well.

All that was offset somewhat by the softness in Southern Mississippi due to new competition in Biloxi as well as additional hotel supply in that market and Alton where we struggled a bit to fully recover from the late December early January flood and of course the lower oil prices continued to impact our business in New Mexico.

But overall certainly a good story in the first quarter. We continued to make operational improvements across the portfolio resulted in year-over-year same-store EBITDA margin improvement across all three operating segments as Tim mentioned.

A few property specific highlights in Massachusetts at Plainridge Park Casino we have an active database North of 160,000 accounts March marked our highest net slot win results since August and we do anticipate the momentum continuing into the spring and summer second quarter and third quarter should be the strongest seasonal quarters in that market.

Moving to Las Vegas Tropicana the casino floor refresh works and Marquee Reward integration project is now complete. I am happy to report that our initial 10 database offers dropped in early April about three weeks ago and the response so far has been very encouraging.

We have on the books over to thousand unique reservations and over 6000 room nights for the month of May and June.

So we anticipate to learning a lot obviously in the coming months and we will have more to share with all of you during our second-quarter earnings call with regards to those reservations and the behavior of the consumers when they are in Las Vegas staying at the Tropicana.

The last think I would mention about Tropicana first quarter the non-gaming trends continue to be very strong much like the rest of the strips we saw RevPAR a growth of over 10% but it was offset gaming volumes were really anemic in the first quarter due to all of the aforementioned disruption on the casino floor.

Those of you who have visited recently will find that the casino floor now has new products we have a brand-new casino management system in place there we have pathways throughout the casino so with a lot of disruption in the first quarter but we are set up to benefit from that for the remainder of the year.

Some additional color on overall database results.

We experience flat to moderate growth in both spend per visit and visitation and I would stress visitation we haven't seen that across the lower segments and some time and we are now seeing growth in spend per visit and visitation across most all of our segments with particular strength in the first quarter at the high-end level VIP segment as well as the lower retail and unrated segments.

Nothing new to report and the promotional environment remains stable and rational across all of our key markets. Palazzi is the only one that continues to be a bit elevated. There's a new entrant in D'Iberville that continues to be very aggressive in to our customer reinvestment.

I think you heard that from Boyd, and we are seeing that as well impact as at Boomtown. But overall good story in the first quarter and we're comfortable with our numbers for the rest of the year. So with that I will hand it over to Saul to go through guidance..

Thanks Jay. As we turn our outlook to the remainder of 2016 the recent signs of improvement we have seen over the last several quarters are projected to continue. Our regional U.S. gaming business has been stable the early months of this year.

There are encouraging signs for consumers while rising slightly gasoline prices are still at relatively low levels, employment growth has continued and wages are creeping higher, housing demand and prices are healthy and overall consumer demand remained steady but cautious. For us specifically our growth opportunities remain sound.

Flow-through from revenue gain is consistent and with our near-term completion of the new project we will be able to use our free cash flow to de-lever. After our normal detailed property by property review we have left 2016 guidance unchanged other than to account for the positive results from the first quarter.

The quarter ending June 30, 2016 we have set guidance for net revenue at $786.8 million and adjusted EBITDA at $225.5 million. As a reminder, adjusted EBITDA excludes payments under our master lease as it is now accounted for as a financing obligation.

Also in 2016 guidance includes a full year contribution from Plainridge Park, Tropicana Las Vegas Prairie State Gaming and are iGaming business.

We contemplate commencing our management contract at the Jamul Indian Village at mid-summer and have considered a fourth quarter opening at MGM National Harbor and will continue to pursue third party financing projects for the Jamul project.

Page 5 of our press release provides current estimates for corporate overhead, depreciation and amortization, interest expense and non-cash compensation – stock compensation. It also includes the amount of actual cash payments under the master lease for the quarter.

In addition some other key data points are cash on hand at March 31, 2016 of $214 million all of our debt covenant ratios have been comfortably met, project CapEx inclusive of project for 2016 is estimated at $285 million with $102 million in the second quarter.

Maintenance CapEx for 2016 continues to be estimated at $83 million with $35 million of that in quarter two. Our cash basis effective tax rate for 2016 is currently estimated at 9.5% and finally free cash flow before project CapEx and principal payments of $246 million – and principal payments will be $246 million for the year.

Our Form 10-Q that we will file next week will present the details of our revised segment alignments that we recently announced. And with that overview, we can open for questions..

Hi, good morning – excuse me. Good morning, thank you. In your prepared remarks, you commented on I think, Jay this is from you milder weather and the leap year also helped to consumer benefiting the quarter.

But I'm assuming that that was included in your guidance, so when you think about the positive variance to your EBITDA guidance for the quarter, where were you most surprised?.

Sure, I really – Felicia, I mentioned in my opening comments, we had a great quarter in Ohio. We had a great quarter in Missouri. And we’d like to believe that those results will continue through the remainder of the year. It is probably taking a bit of a conservative approach here. We want to see one more time behind us.

I think it's difficult when you're aided by weather or hurt by weather to understand exactly what percentage. And so we have looked at it in a number of ways. And I think that half of our beat for the first quarter probably around 50% or half of our beat was due to the leap year dynamic and the weather and about half was due to the healthier consumer.

So if that healthier consumer dynamic continues through the remainder of the year then our guidance is likely conservative, but we would like to take that approach at this stage. We have a lot going on obviously and we’ll going to open mid-summer, we don't have an exact opening date yet. We have to build that into guidance.

And of course Tropicana is the real wildcard because we've got great story customers are booking in the hotel. And we just need to understand more about their behavior when they’re in Las Vegas before we’re making the adjustments to our assumptions there for the remainder of the year..

That makes sense. And then that’s a good segue into playing rich because you highlighted in the prepared remarks. I just wondering if you could just dig a little bit deeper and give us an update of what's going on there. I mean, certainly, it’s not just the better weather but that's improving and driving.

I mean obviously you guys have made some changes there.

So, can you talk about not only how you expect the ramp, but I mean you just say better second and third quarter, but how should we be thinking about win per unit per day metrics and things like that?.

Sure. So we said multiple times Felicia that we're not going to be happy unless that win per unit per day starts with the four. We’re in the mid-3s now and we seem to be sort of stabilizing at that level and we should be able to grow off of that base. We’ll see more in the second quarter and third quarter.

We continue the right size the cost structure there. Our marketing reinvestment is something that we continue to evolve. Every market behaves differently and we have obviously less slot machines and less offerings and some of our key competitors there in Rhode Island and Connecticut.

So we have to be a bit more aggressive on the – credit side, but that’s been working for us. We’ll continue to make adjustments as we move forward and hope to continue to drive that win per unit from the mid-300s up to 400.

Certainly from an overall margin perspective, the margins in Q1 were better than Q4 and we would expect to see them better in Q2 than they were in Q1..

Thanks. Just a final smaller question just – at the Trop I know you have had plans to replace the OTA customers.

It sounds like some of that is starting now as you kind of tie in your Marquee Rewards, but where are you in that plan?.

We're in the early innings. We’ll know a lot more. We’ll have a lot more to share, Felicia, on the next call for the second quarter. Obviously that’s the displacement dynamic that we described before in OTA when we acquired Tropicana represented close to 50% - 50 of the room nights.

We've got it down to 40 in the first quarter and we would like to see it down to 20% – maybe in the second quarter 25%. But we’re very happy with the level of interests and activity from our database with the initial offers that were sent out and reservations are rolling through everyday and picking up.

So, we’ll see once we understand more about their behavior after their first visit..

Great, thanks so much..

Thank you. Our next question comes from the line of Steve Wieczynski with Stifel Nicolaus. Please proceed..

Hi, good morning guys. So, Tim or Jay, I guess the question on BTU guys.

I mean when you look at your average customer now coming through the door, can you help us to understand what are they doing more of at this point, is it more, are they staying, are they spending more on the gaming floor, are they spending on non-gaming or is it combination of all those things?.

Sure, Steve, this is Jay. It's a little bit of everything. As I mentioned in my remarks at the beginning for several years, the last several years, it was really more on the spend per visit at the high-end, the mid-level and high-end customer and what we’re seeing now is we're actually seeing some growth in visitation at the low-end.

And so, we're starting to pick up some extra trips at the low-end. Our unrated business actually showed real significant growth in the first quarter, which is I think speaking to the general health of the economy. And we're seeing the non-gaming trends move in the same direction, Steve, as we are the gaming.

So we’re not seeing large single-digit increases, but in markets like Ohio and Missouri where we’re seeing the gaming same-store sales growth of over 6%. I alluded to we’re seeing the same thing on the non-gaming side. Cash revenue in our hotel, cash revenue growth in food and beverage and we’re working on some refurb the projects in Missouri.

We're renovating our hotel – one of our two hotels in St. Louis right now and adding a couple of restaurants at Riverside in Missouri. So we want to maintain that momentum..

Yes, Steve, this is Tim. We have over the last couple of years upgraded our entertainment offerings across a number of our properties and added or changed out and improved our food and beverage offerings. As Jay stated we're seeing nice cash growth in the non-gaming area.

With these results we're looking at other properties in Missouri and elsewhere that we want to put modest levels of capital to continue to upgrade the experiences for our core customers who come twice a month and I think that's important in our business we need to continue to refresh our offerings since our customers have such high-frequency of visitation..

Great, thanks for the color. And second question probably is going to be fore Eric maybe just an update in terms of what's going on in Kansas at this point I know there is some debate out there about opening additional racetracks and I think you guys at this point obviously have objective so maybe your longer term view of what happens there..

Yes, this is the proposal to put slice at the Woodlands racetrack. We survived the legislative process without a tax rollback for that proposal to move forward which lumpiness thing is gating item for him to want to open it as you can see now we want to roll the tax back.

There was a special use permit that was preliminarily approved by the planning commission and it now goes before the full commission.

So we're going to continue to oppose it as part of a broad-based coalition fighting to keep them from trying to change the rules in the middle of the game and expect this to be an issue that we have to address again when the legislative session comes back together..

Thanks guys I appreciate the color..

Take care, Steve..

Thank you. Our next question comes from the line of David Katz with Telsey Group. Please proceed..

Hi, good morning..

Good morning, David..

I wanted to just talk about San Diego a little bit. I know you touched on it a bit but I want to make sure or I would like to have you help us make sure that we do not get too far ahead of ourselves in terms of the ramp-up of that property.

Clearly we see where it is and what is prospects for and the like but help us think about and maybe this is best for Jay, what the trajectory of that ramp-up is going to be as we roll it in.

And I suppose I would ask and I don't know if you mentioned it but I assume there is no update on refinancing their property at the property level and taking it off your balance sheet at this point, correct?.

I will talk about the first part of your question and asked Saul to tackle the question on the refinancing status.

I would anticipate, David, that from a ramp perspective to your specific question it would be similar to what we have seen in other markets, other competitive markets where you're going to have a very strong first couple of months it is going to sort of flatten out and you will hit your trough somewhere between month three and six and then you will start to grow that business going forward.

I think the impact over all to Penn National gaming in terms of EBITDA contribution will be much less noticeable just because it's a management agreement it is not a wholly-owned property. So you're going to have a management fee collection going to be collecting a licensing fee but in total that ramp be less noticeable overall.

Remember too, that that market like most Native American markets we don't have exact information with regards to gross gaming revenue.

We have insights and we believe that that East County market which today is made up of Barona, Sycuan, and Viejas and we will be made up obviously with more added as well we have good information that it is somewhere between a $700 million and $800 million annual growth gaming revenue market.

So we anticipate being able to grow the market given our location and approximate location to downtown San Diego and some pretty significant population centers El Cajon, Chula Vista, National City and the like.

We can grow that market within probably 10 plus percent and then there's going to be obviously still enough share from some of the competition in that market as well..

And David just a follow on and not to be cryptic at all but we are continuing to work with third-party financing alternatives and hope to have an announcement before opening of the property. .

Before opening of the property..

And if we don't, David, then just as we have always assumes if we can reach an agreement then we’ll just refinance this loan a couple of quarters after we do open and demonstrate performance. .

Got it. One more if you don't mind. Just with respect to the West which again the ramp in Tropicana seems like you are making some nice progress there but if you could just talk more about a forward-looking view as to what we can reasonably expect out of that property, the remainder of this year and into next year that would really help..

Sure, David. So the West as you know today it’s simply changed but it’s made up of just three property operating properties until Jamul opens.

There is actually quite a bit going on with those three properties we've got a very healthy business at the M Resort Las Vegas locals cannot be happier with our trends and the results for Q1 and are forecast for the year at that property we've got a lot of headwinds in New Mexico.

Our primary theatre markets and at that property are out of West Texas and Midland, Odessa and Lubbock those are oil markets and just been hammered so unemployment has tripled in the local area and our theatre markets.

So you have that news that works against you and then of course Tropicana we had mostly new good news in the first quarter like I’ve said in my opening comments the non-gaming results were terrific. Group business results were great. But the gaming revenue wasn't there.

We just didn't have any gaming business because we had the floor ripped up because of all the reasons I described earlier implementation of Marquee Rewards and changing out slot products so its really going to boil down to for the rest of the year if we stabilize in New Mexico was their signs that we have if the M Resort locals business continues to be robust and then of course Tropicana we anticipate being able to see some revenue ramp.

We are not as focused on the margin of that revenue ramp the EBITDA for the next couple of quarters of course we are as we head into 2017 but as I said on previous calls. I wouldn’t anticipate a whole lot of EBITDA out of Tropicana and the first year because we've got a lot going on there.

We will really start to see that revenue in EBITDA ramp as we head into 2017..

Got it. And then one last one if you don't mind. Just in terms of your appetite for additional M&A looking forward and you do clearly have a lot of your plate, but we have seen some other transactions occur this week in Las Vegas locals et cetera and we presume that there is a fair amount for sale out there.

What is your - how we should gauge your buying appetite are under what circumstances would you buy something else at this point of some size?.

David, this is Tim, as we always say we are always looking for opportunities Saul did mentioned that we do have a focus over the next couple of quarters to continue our deleveraging activities and I think that will still be a guiding principle for us.

But if we see an opportunity out there that we think is accretive to our shareholders where we can realize an M&A transaction at an attractive multiple it’s certainly not out of the question.

But as you said we have a lot on our plate and I would characterize 2016 is really taking advantage in executing on the things we did in 2015 with the opening at Plainridge the integration and lift we're working toward at Tropicana, the opening of Jamul and Prairie State Gaming we certainly would like to get that platform bigger in the state of Illinois and elsewhere.

I think our primary focus is executing things we have in the pipeline today and continuing to delever but we never say no to anybody that comes to us with an opportunity we take a hard look at it. You never know but there's nothing imminent right now..

I appreciate it. Thanks very much and nice quarter..

Thanks, David..

Thank you. Our next question comes from the line of Carlo Santarelli with Deutsche Bank. Please proceed. .

Hi, thanks guys, and Good morning. Jay just to clarify the comment you made earlier in response to a question. I believe the question was the upside relative to your guidance. And within that I think you mentioned half of it came from weather and the leap year.

Did you mean year-over-year because I would have assumed the leap year, the extra day was contemplated in the guidance?.

Yes, that’s correct, speaking year-over-year growth and where it was coming from in the first quarter, Carlo. Weather certainly impacted us as a tailwind in the first quarter relative to guidance and then the healthier consumer as well..

Got it, great, okay thanks. And then just in terms of two questions both kind of around margins and flow through.

Obviously, there is a lot of new things coming into the mix and clearly some of those things including Tropicana and Prairie State would have had a negative impact on your margins and I think you guys called out the 58 basis points of the core balance of the portfolio.

Could you talk a little bit about what kind of flow through you experienced in the first quarter on the rest of the portfolio i.e., that that piece that was up about 60 basis points from a margin perspective?.

Yes, I mean, you can probably extrapolate from what we’ve shared already, Carlo, what that is. Really it’s – on a same-store sales basis, it’s a pretty healthy flow-through. The only thing that's hurting the margins overall is those three businesses that we talked about previously.

[Indiscernible] hurting too much and margins are continuing to move in the right direction and getting closer to company average.

Prairie State Gaming like just the share nature of the cost structure in the past structure and that market is always going to be low 20% business and Tropicana is very low right now, but we anticipate that ramping over time, not a lot of EBITDA coming out of Tropicana earlier this year.

But the overall flow-through that we’re happy with I mean from a dollar of revenue that we’re growing outside of the gaming tax. I mean you’ve got some incremental maybe a little bit of marginal increase in your overall labor and marketing, but we’re seeing very healthy overall flow-through..

Great, that’s helpful. And then just lastly on Tropicana, I know you guys kind of mentioned not a lot of EBITDA coming out of it right now.

Could you give maybe some clarity around where not necessarily the absolute numbers as I would assume would be remiss to do that, but kind of what the margin opportunity is i.e., you’re at 50% of where you think margins can ultimately go something along those lines?.

It’s – we’re at low single-digit percent of where I think we can get to..

Okay..

Nowhere near 50, but the margins are very low, remember this is a business that was doing about $10 million a month in revenue. We’ve seen some movement both to the good and bad positive directionally on non-gaming revenues, negatively on the gaming revenues, but that should really start to change here in the second quarter.

And margins should only get better as long as the behavior of these database customers, multi-reward customers when they stay. And we’re capturing even 50% of their overall gaming when they’re in Las Vegas. This is going to be a great story for us and that is certainly our goal..

And just from that sorry and then I will stop. The Tropicana, I am assuming that the puts and takes giving gaming is a little bit bigger and you’re calling that down the net revenue would’ve been down year-over-year just given gaming better in some of the non-gaming stuff – sorry gaming weaker and non-gaming a little bit better..

Yes, just a bit. Carlo, it really – believe it or not that last statement was impacted negatively more by New Mexico than it was Tropicana..

Right..

And we’re really soft at the property right now. And key signs of stabilization which will help us overall for that segment because the end result had a fantastic quarter..

Great. Thanks a lot, Jay..

Thank you. Our next question comes from the line of Steven Kent with Goldman Sachs. Please proceed..

Hi, good morning. Could you give us – you started to give a little bit update on Prairie State Gaming, how that business is doing. But maybe give is a little bit more color. And then you did say that you were hoping for some opportunities there.

What is the opportunity set what are the timing factors there besides price and that you don’t want to lever up your company? Is it just the logistics of looking at these disparate slot routes? So that’s my number one question. Then the second question is, Zia Park, I just dig a little deep into your company, seems it’s still a little challenged.

Is that still oil related? Do you see a bottom there? How should we think about that property?.

I will take the first question. Stephen, this is Tim, on Prairie State, and then I will let Jay cover the Zia Park question. We purchased Prairie State Gaming and it has been an excellent transaction for us, immediately accretive. And we brought about 5% of the Illinois market, which I think is about $1 billion market at its current run rate.

We certainly want to get a bigger platform there and then look at other jurisdictions because we now understand the business better. We understand the potential synergies of integrating a second and third business into what we have already today with about 270 establishments in place in Northern Illinois and Central Illinois.

The issue is really finding a willing seller at an appropriate price. And we are aggressively talking to all the major operators there. And we’re going to get something done this year. I just can’t tell you when.

But it’s just finding a willing seller at the right price, it’s all about economics and we’re going to get there because we like this business, we know it better now. It’s very complementary to what we already do in the state of Illinois with a riverboat licenses.

We think there is a lot of synergies and a lot of things we can do to improve on the current operators there that do not have the scale that we have operating in that state. Okay.

Can you cover the second question?.

Sure. With Stephen, with regards to Zia Park as I mentioned earlier, we see signs of stabilization in that business now. It was really the most significant drop-off occurred last year in June.

So we are approaching lapping that impact from the annual basis here in the late second quarter and I would anticipate that we should start to see some flats, maybe even growth, really depends on what happens with oil prices. Price per barrel down below $30 just a few weeks ago and now you are $45. That only helps our business there.

So we will see what happens. I think June is more that turning our stabilization point for us and there is less impact even in the month of April and May on a year-over-year basis..

Okay. Thank you..

Thank you. Our next question comes from the line of Joe Greff with JPMorgan. Please proceed..

Good morning, guys. Tim, you mentioned EBITDA grew 15% – 15% year-over-year in 1Q.

If you would look at that on a same-store same facility basis, what is that same facility EBITDA growth?.

Jay, why don’t you answer that question?.

Sure thing. So if you extracted new business and just look on appear same-store sales basis, Joe, we saw same-store sales in the business north of 1% for the quarter. And it really was, like I said earlier, a mixed bag of great story in Ohio and Missouri offset by weakness in New Mexico, Mississippi and property like Oak Illinois.

We had some properties that were in that 0%, 1%, 2%, some were north and a couple of that showed slight decline for one reason or another. But overall, it’s north of 1% and less than 2%..

That’s revenue..

Sure..

I think Joe Greff question was EBITDA. We said 15% growth..

I think it is about 50-50..

Okay that’s where I end up with if I estimate Tropicana Plainridge PSG, I kind of get mid high single-digits. Okay..

Sorry about Joe, I was touching revenue..

Okay. And then Saul, I know you gave us some statistic on full year project CapEx, maintenance CapEx, cash tax rate. Can you give us those items in 1Q maintenance project cash tax rate or cash taxes paid in the 1Q? Thank you..

Maintenance in 1Q was $50 million. Project in 1Q was right around $52 million. And our tax rate in the first quarter was actually a little bit lower, that we’d say, there was a refund from prior year carry back that we had an opportunity to get. So our tax rate in the first quarter was lower than the expected full-year rate.

And is also what is driving the lowness of the full-year rate itself..

Okay. I guess I can do this, plus I have you here.

Of the $52 million, how much of that was home?.

Operationally, all of it..

All of it? Yes. Great. Thanks guys..

Take care, Joe..

Thank you. Our next question comes from the line of Thomas Allen with Morgan Stanley. Please proceed..

Hey, good morning. Just in terms of the social initiative, I mean you gave some brief comments there, but can we get more color on how that’s picking up? Thanks..

Well, Thomas we launched hollywoodcasino.com that’s in the fall of 2015 with our partnership with scientific games providing us content. And I am pleased to report at the end of the first quarter.

We have now marketed that content to our entire Marquee Rewards database that we have the ability to communicate with online and that business continues to grow very nicely. We just launched our second content line with a company called OpenWager, it’s hollywoodslots.com just rolled out a couple of weeks ago.

The good news is we’re making money in the first quarter with their online a little bit, but we’re more importantly growing this and trying to get this thing scaled up to continue to grow this with our customers from a retention standpoint and just as importantly growing new customers to try to continue to establish relationships with people who haven’t visit us and our bricks and mortar facilities.

And what we’re now working on is integrating Marquee Rewards into that online platform so we can connect that customer roughly with our rewards program to give them incentives to play with us online even at greater levels and also visit us at our bricks and mortar facilities.

If they so choose with various recognition and rewards through the loyalty program we have. So the good news is we’re continuing to grow at a very nice pace.

And it is now slightly profitable, but we have more long-term perspectives for this business that we are continuing to work on as we look at opportunities to add new content and reach new customers..

Helpful. Thanks. And then two quick numbers questions. One, so, you did a very good job on margin in the quarter your EBITDA gains by $10 million.

Is there a way to quantify the buckets that drove that outperformance? I think the implication is there with some benefit from tax mix, but maybe also could you talk about – could you quantify the labor versus expectations and maybe promo. And then the second question is just around Tropicana.

I think Jay said not to expect too much EBITDA from the property. But can you just help us think about seasonality of margins. Should cash flow or EBITDA go negative in the third quarter during this slower Vegas summer? Thanks..

Sure. With regards to overall margins I will answer that one first. Taxes really not weighing on the results much at all, Thomas it is really the result of us improving the operation mostly in the areas of labor and overall marketing.

Those are the two largest buckets and our property operators continue to do a great job making adjustments to the cost structure and generating very healthy flow-through on any dollars incrementally on the revenue side. With regards to the margins of Tropicana it’s really difficult to say.

Seasonally I can tell you what the Las Vegas strip market does.

Q1 is a strong quarter, Q2 was a pretty good quarter, Q3 is very soft because of the hot weather, Q4 is usually a softer quarter, but I cannot tell you exactly how that’s going to play out for Tropicana this year just because we have the database, I think a pretty important factor for the remainder of the year.

So we anticipate margins only getting better from here, but hard to say exactly how it’s going to play out this year. I think once that business gets stabilized it’ll probably follow the course of what you see typically for other operators in Las Vegas..

Thomas just to add if you check the little chart in the press release you will see that 8.7 million of beat came [ph] strictly from operations. The unusual items were minimal this quarter and so Jay’s coverage for the reasons of that beat [ph] are pretty clear. .

Okay thanks. No, I mean, I was just – my confusion was the commentary are earlier was half of our performance came from Ohio and Missouri [indiscernible]. But it seemed like revenue was more or less in line with your numbers and so there are obviously offsets further weaker performance you said in New Mexico, et cetera.

So I just want to make sure there wasn't taxes like a mix of taxes. But it seems like you did a very good job driving efficiencies on labor and marketing..

Cool..

Right. Thank you. .

Yes that is good that’s correct..

Thank you. Our next question comes from the line of Brian Egger with Bloomberg Intelligence. Please proceed..

Good morning. I know you identified national Harbor as a potential second-half competitor event for Charlestown and the East/Midwest segment. And given that factor that property has potential both [indiscernible] the affluent suburban communities that are feeder markets for Charlestown but also go after the global tourism based in DC.

Could you share any thoughts about how that's likely to play out in other words the extent to which your customer database for Charlestown is primary or secondary target for what National Harbor is likely to be about?.

I will take a stab at this one. This is Jay. I think that's going to be parts of our database that are going to be primary end parts that will be secondary focus for MGM National Harbor when they opened. The good news is that northern Virginia, Western Maryland market is deep.

And I think that's been proven since Maryland live opened a few years ago and horseshoe Baltimore our Charlestown property is still a number one producer of revenues and EBITDA in the company. And we anticipate that still being the case after National Harbor opens.

We think that in the Frederick Maryland area Loudoun County, we think what we've got a great chance to keep the vast majority of those customers certainly at the mid-level in high-end segments where we've got pretty deep relationships. And of course we anticipate having to fight hard to keep business closer you get to Washington DC.

But the competition of our database at Charles Town is much more heavily skewed toward northern Virginia and Western Maryland today..

Okay thanks. That color is very helpful. Thank you. .

Thank you. Our next question comes from the line of Chad Beynon with MacQuarrie. Please proceed. .

Hi, thanks for taking my questions. The first one just a high level on the operations, very disciplined around promos in the quarter from a percentage of revenue standpoint and I think we’ve kind of seen this trend with you guys and your competitors now for several quarters if not years.

So my question is, is there something that you’re expecting in the medium-term from a stability standpoint. Has the industry become permanently – has the business model permanently changed for the positive? We just haven't seen promotions kind of get out of whack for some time.

If you could kind of opine on your medium-term outlook on that that would be helpful..

Sure. I guess the best way to answer it is just looking at what's happened with our primary competitors. And you look at the flow-through for board gaming and pinnacle what you can even get from Caesars in the regional market but since everyone has been behaving more rationally I think everyone has benefited from that.

And that’s always been our approach very disciplined and so we don't typically get involved in marketing well as fighting for low profitability or unprofitable customers. And it looks like most are subscribing to that approach these days and I think most are benefiting from that as well.

So it is hard to say, you’d have to ask others that question as well. That’s been our approach, it will be our approach and that is consistent with what we've done here then..

I agree with you, Chad. I think the last two years we have seen a real stabilization across our property portfolio with the exception of some privately held operators in southern Mississippi, we don’t see a lot of our competitors trying to chase customers and move share at unreasonable reinvestment levels.

So that’s a very healthy situation to operate in. And I think it is the reason why you see our margins continue to improve. .

Okay. Thanks. My follow-up since no one has touched on Lawrenceburg. Nice to see that the last two months from year-over-year GTR perspective were positive, I think last quarter you talked about some of the disruption and we’re obviously facing some pretty easy lapping of comps.

Could you give us an update on where that property stands Ohio was extremely positive and it looks like Lawrenceburg benefited as well just kind of your outlook if we’ve hit the bottom there?.

Sure Chad. I think we have. I think we hit the bottom in the second half of last year and a lot of that was due to the bridgework that I touched upon a previous earnings calls maybe we should have highlighted that more as we were going through it in the third quarter and fourth quarter of last year.

But the bridgework is behind us, our customers seem to be responding well to our offers even those that sort of fell off during that bridge construction period. And our team at Lawrenceburg did a really nice job in getting that business stabilize and we will continue to work on margin improvement there like we do everywhere else and see where we go.

But feeling much better about that business and its trends than about six months ago. .

Okay. Great. Thanks a lot. .

Thank you [Operator Instructions] our next question comes from the line of Sean Kelly Bank of America. Please proceed. .

Hi this is Barry Jonas. Just had a question on Massachusetts, can you give us an update on competition from new supply specifically there have been reports of a temporary casino opening in Taunton sometime next year. Thanks..

Do you want to take that?.

Sure. So actually today there's going to be a vote of the unanimous [ph] gaming commission on a potential license in the southeast which would be brought in to $667 million proposed casino by Rush Street Gaming.

The Mashpee Wampanoags meanwhile backed by Genting [ph] as their operator are already underway they have broken grounds for a proposed billion-dollar facility in Taunton. There is some litigations swirling around both and we will have to see what happens at the gaming commission today.

Really I don't want to speculate on how that vote may go but we're watching both very closely. .

And I know the tribe has said that they are going to get something open in the 2017. I think that remains to be seen and obviously we will know more as the next month is progressing we get a handle on what happens in the quartz with the challenges. .

Got it. Okay. Thanks very much. .

Thank you. I'm showing no further questions at this time. .

Thank you, operator. And thanks again to everyone who listened in on this call.

We look forward to getting back in touch with all of you towards the end of July to talk about our second quarter results and as they said we will have a lot more information at Tropicana as we see the progress in the activity of our database taking effect with all of the room nights that Jay has talked about that are on the books today.

So more to come there but again very solid first quarter and we look forward to talking to you in about three months. Take care..

Thank you ladies and gentlemen that completes a conference call for today we thank you for your participation and ask that you please disconnect your line..