Good morning, and welcome to the Twin River Worldwide Holdings Third Quarter 2020 Earnings Conference Call. [Operator Instructions].

I would now like to turn the call over to Craig Eaton, Executive Vice President and General Counsel. Please go ahead, sir. .

Good morning, everyone, and thank you for joining us on today's call. By now, you should have received a copy of our Q3 2020 earnings release 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.twinriverwwholdings.com under the News and Events and Presentations tabs. .

With me on today's call are George Papanier, our President and Chief Executive Officer; Steve Capp, our Chief Financial Officer; Marc Crisafulli, our Executive Vice President of Strategy and Operations and he's also President of our Rhode Island Operations; Phil Juliano, our Chief Marketing Officer; and Joe McGrail, our Chief Accounting Officer..

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..

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 Investors site and will be available for replay shortly after the completion of this call. .

I will now turn the call over to George.

George?.

Thank you, Craig. Good morning, everyone. We're extremely excited to take this time to provide some additional color on the multitude of recent announcements we've made, and we appreciate you joining us.

Since our last call, we have made significant progress on many our strategic growth initiatives, and there's a lot to cover so we'll just get right into this. .

Dating back to our first acquisition of Hard Rock Biloxi in 2014, continuing to our Dover Downs' merger and going public in early 2019, then through the strategic acquisitions that we have announced or consummated in just the last 6 months, we have been disciplined in our targeted growth initiatives.

We have transformed from a single-property operator in Rhode Island to an increasing national player with soon to be 14 casino properties, and more importantly, operating in 10 states. We have made significant progress towards our goal of becoming the industry leader for gaming and entertainment in America. .

There's still a lot of work to do, but we feel we reached a major milestone with yesterday's announcement that after acquiring the iconic Bally's brand from Caesars back on October 13, we will be rebranding the company as Bally's Corporation and begin trading on the New York Stock Exchange under the ticker Symbol B-A-L-Y beginning November 9. .

Bally's is an iconic brand that's commensurate to the premier properties and amenities that define our diversified portfolio. The brand has a rich history of gaming and entertainment that will provide immediate and enhanced nationwide brand recognition. This is a significant part of our long-term growth strategy.

And acquiring this brand now accelerates our ability to execute on it..

We have begun the process of evaluating how we will best leverage this prestigious brand. I look forward to talking more about our vision for the brand over the next several months..

Since our last call, we've taken significant steps in our evolution of advancing our disciplined portfolio diversification strategy, opportunistically expanding our regional presence through accretive transactions in Illinois with Jumer's, and just 2 days ago with the announcement of our latest acquisition, Tropicana Evansville property from Caesars.

Unlike our past acquisition, in Indiana, we have partnered with a REIT to purchase the operations at Evansville with GLPI acquiring the real estate. With this transaction, we will also be selling the real estate of Dover Downs to GLPI, and entering into a long-term master lease on both properties with rent totaling $40 million per year..

Structuring the deal with GLPI allows us to acquire the operations in Evansville for $140 million, which represents an adjusted EBITDA multiple of 4.4x on a pre-COVID basis without using any cash, with not increasing outstanding debt as a result of this transaction. .

Net of the master lease payments, we expect to pick up $20 million of EBITDA as a result of this transaction. On top of that, we're also acquiring unencumbered rights to the sports betting and iGaming skins associated with the Evansville operations to access the growing Indiana market. .

This transaction represents our first foray into propco/opco structure. We look forward to partnering with GLPI on both the Evansville and Dover properties as well as our potential opportunities in the future. Steve will provide more detail on the transaction and specifically the REIT financing aspect of this transaction in a few minutes..

In addition to this week's announcements, earlier this month, we announced our intention to acquire the Jumer's Casino & Hotel in Rock Island, Illinois from Delaware North. The purchase price for this acquisition is $120 million, which represents a 7.4x multiple based on Jumer's adjusted EBITDA for the year ended December 31, 2019.

Of note, we completed our offering of $125 million additional senior notes on October 9. This will aid in the payment of the purchase price for Jumer's. This acquisition is expected to be immediately accretive to earnings..

We are confident that both of these acquisitions represent value-accretive multiples for bricks-and-mortar operations on a stand-alone basis, while further expanding our geographic reach into additional attractive markets.

This transaction also provides access to growing gaming markets in Indiana and Illinois with the potential to capitalize on lucrative sports betting and iGaming opportunities.

We look forward to the opportunity to leverage our operational expertise and proven integration approach to drive incremental revenues and cash flow improvements at both locations..

We continue to be very active in the M&A market, taking a disciplined approach. Our pipeline is strong, and the markets are seeing increased activity. We will continue to be opportunistic in finding the right opportunities that align with our long-range strategic goals. .

But M&A is not our only growth strategy. During the third quarter, anticipating the closing of Bally's in Atlantic City in Q4, we announced several exciting strategic partnerships, both in sports betting and iGaming for several of the licenses we will be acquiring as part of the transaction. .

We remain enthusiastic about the proposed IGT joint venture in Rhode Island, and we expect these partnerships to be accretive to earnings. Marc will provide a further strategic update shortly..

In addition to all these announcements, we reported strong third quarter financial results. We closed out the quarter with adjusted EBITDA of $38 million, up $2.4 million or 6.8% in the same period in 2010.

Most encouraging in these results was the improved margin performance, which when coupled with the incremental EBITDA provided by our newly acquired properties, helped to offset the decrease in revenue we experienced as a result of COVID-related capacity restrictions and ensured that operationally, we were cash flow positive for the quarter. .

Consistent with what we discussed on our last call about our operational performance in late Q2 and early Q3, in segments where the company were able to operate at closer to normal capacity, we were with more amenities available for most of June, most notably in Southeast segment, which consists of Biloxi and Vicksburg.

In the Mid-Atlantic segment, which consists of Dover, we experienced strong demand and significantly improved margins. .

For the second quarter in a row, the strongest individual performer in the portfolio was our Hard Rock Casino in Biloxi. Overall, the Southeast segment provided adjusted EBITDA of $16.4 million for the quarter.

But within that segment, Hard Rock accounted for $14.4 million of adjusted EBITDA in Q3, which represents an increase of $4.5 million or 46% over the prior year. Vicksburg also outperformed our expectations for the quarter and contributed year-over-year adjusted EBITDA percentage growth consistent with that of Biloxi. .

Dover also shows strong adjusted EBITDA growth in the quarter increasing $1.3 million or 20.6%. While Dover revenue was down approximately 24%, adjusted EBITDA margin showed an almost 1,400 basis point improvement year-over-year. .

We also saw the gradual lessening of restrictions in Rhode Island over the quarter. It did sort of impact results, especially compared to our initial reopen period in June. Although demand in Rhode Island has rebounded, it's still below pre-COVID levels. .

Travel restrictions that went into place in Massachusetts in August, coupled with minimal food and beverage offerings and the continued closure of hotels still remain headwinds.

However, in spite of this, the Rhode Island segment still produced adjusted EBITDA of $15.1 million as margin improvements of over 300 basis points somewhat mitigated the revenue reductions and helped ensure the segment generated positive cash flow. .

On our West segment, and specifically, some commentary on the performance of Casino KC and our first quarter of ownership. For the first quarter, the segment contributed approximately $19 million of revenue and $4.7 million of adjusted EBITDA.

These results are extremely encouraging as not only do they represent a strong first quarter in Kansas City, which was relatively in line with the historical performance for the property, but they were also only recently allowed to open 24 hours. We are still operating with limited food and beverage operations.

Additionally, these strong results do not reflect any upside you might expect as a result of the planned $40 million capital improvements, which will kick in or kick off next year. .

A recurring theme of this quarter was robust margin improvements. Digging into the numbers a bit more, since reopening, we have realized meaningful new efficiencies with reductions in labor expense and marketing spend, which have helped to drive operational free cash flow.

We continue to be selective with our amenities in Q3, focusing on higher-margin business. .

As a result of these expense reductions and new efficiencies, we are now operating at an even higher margin than prior to the pandemic. For the third quarter, on a same-store basis, we noted an adjusted EBITDA margin increase of approximately 650 basis points. Labor savings accounted for approximately 270 basis points of the improvement.

Our marketing savings led to another 160 basis points. The remainder of the increase can be attributed to lower cost of goods and the elimination of certain lower-margin revenue offerings such as buffets. .

While the acquired properties were slightly dilutive to adjusted EBITDA margins for the third quarter, it should be noted that the same-store margin is artificially high because revenue in Rhode Island and Dover is reported net of gaming taxes, which is atypical for the industry.

Even with this impact, the overall adjusted EBITDA margins were up over 500 basis points. .

While the margin results are very encouraging, and we think there is certainly a component of this improvement that is likely to be more permanent in nature, the gaming environment continues to be very dynamic. We will remain adaptive and will continue to be willing to spend money to retain and to capture market share and drive revenue.

We believe many of the efficiencies we have realized are sustainable over the long-term and will result in improved profitability for our properties going forward, deeming though increased sanitation and safety costs are likely to become the norm. .

Before I turn the call over to Marc, I also want to comment on exactly where we are from an operations perspective.

As we go into Q4, particularly given the ongoing pandemic, rather than going through the list line by line, I would refer you to Slide 5 of the Q3 investor presentation we posted on our investor site this morning for a current rundown of our operations in light of COVID restrictions at the property level. .

Overall, we are operating with greater capacity and amenities versus the end of Q2. It seems as though we continue to get closer to full capacity. However, we are still somewhat limited. We're excited for the day when we can fully reopen and provide all amenities to our customers.

In the meantime, we remain committed to meeting or exceeding all guidelines established by the CDC as well as our property-specific comprehensive health and safety protocols that we have been developing in close consultation with state regulators, health officials and local jurisdictions. .

I'm very proud of how hard the teams at the property level are working to keep our customers and team members safe during this challenging environment. I will now turn it over to Marc. .

Thanks, George, and good morning, everyone. Let's focus first on Bally's Atlantic City. We continue to work through the licensing process with the New Jersey Division of Gaming Enforcement, and we have our hearing with the Casino Control Commission next week. We are optimistic that we will obtain approval and take ownership in mid-November. .

Concurrent with the licensing process, the team has worked diligently to develop a comprehensive and exciting integration and strategic initiative plan for Bally's AC. We will launch that plan immediately after closing.

On a targeted basis, we will greatly improve the property and customer experience, including a phased hotel room refurbishment and the addition of several new amenities. These CapEx projects will be spaced out over multiple years, starting in early 2021 to minimize any customer disruption. .

Sports betting is an important part of our plan for New Jersey. We are thrilled to announce that pending licensing and regulatory approvals, we have partnered with FanDuel to manage our sports book at Bally's AC.

FanDuel has been a great partner for us in Colorado, and we are very excited to expand our relationship with them by adding a robust market like Atlantic City. .

The permanent sports book location is going to be one of the many exciting changes we have in store for Bally's. It has a unique location just steps away from the center of the Boardwalk where millions stroll by annually.

We look forward to commencing construction on the permanent sports book, which will have a direct entrance from the Boardwalk shortly after closing. We anticipate opening the permanent FanDuel sports book in the spring of 2021. While construction is proceeding, we will open a temporary sports book on the first floor of the casino. .

This FanDuel partnership is the latest announcement involving sports betting and iGaming in New Jersey, where we stand to acquire 3 sports betting and 5 iGaming skins upon closing of the transaction. We have already announced strategic partnerships with PointsBet, Esports Entertainment, Sporttrade and theScore Bet.

All of these agreements are accretive to earnings and brings something new and different to the expansive and cutting-edge New Jersey mobile gaming market. We are also keeping one sports betting and one iGaming skin in New Jersey for our own future use. .

Retaining skins for our use is an important part of our emerging national interactive strategy. As George mentioned, with our pending acquisitions, we will now operate in 10 states. The company's rapidly growing footprint will allow it to serve the over 80 million customers that reside within the markets for these 14 premier casino properties. .

In addition, the customers in the company's database will increase to approximately 14 million. We intend to continue to grow this great footprint with the same discipline that we have always exercised. .

With the Bally brand and the unencumbered skins we have acquired and reserved in our portfolio, we can now unite our customer offerings across our various physical properties while having a singular online and mobile presence with a brand that is synonymous with gaming.

We intend to be the first omnichannel gaming company operating both physical casinos as well as seamlessly integrated digital solutions. .

We will not be a land-based operator that is afraid to lose the past. Instead, we will take advantage of our regulatory incumbency and the retail customer database to embrace the incredible growth potential that a digital future holds. This is all happening in real time. And with each announcement we make, we are adding another piece of the puzzle.

We look forward to unveiling our rebranding rollout strategy that George previewed in the first half of 2021. .

Please let me take a minute to update you on the status of our other pending transactions. We continue to make progress on regulatory approval in both Louisiana and Nevada, and believe we are on track to close those acquisitions in late Q1.

We currently believe Jumer's Illinois will close in Q2 of 2021, and we are aiming for Indiana to close in the first half of 2021. We look forward to working with the local regulatory authorities to receive all the necessary approvals and complete these acquisitions. .

Let's now turn to the status of the IGT joint venture, which George mentioned. As noted on our last call, the proposed legislation that would enable this joint venture has the full support of leadership and both chambers of the General Assembly as well as the governor and her administration.

We are hopeful that the assembly will come back after the election in November to address and pass this legislation. .

In the event it does, we remain committed to proceeding with the expansion of our Twin River property in Lincoln quickly. We are close to completing the design and receiving the necessary permits and approvals. Essentially, the project is shovel-ready right now..

With respect to the other terms of the legislation, we expect to assume management of a portion of the VLTs on the floor in early 2021, and we expect a joint venture with IGT to commence on January 1, 2022, as we have previously announced. We will provide a further update as this develops. .

The final item I would like to cover with you this morning is CapEx. The Lincoln expansion project will occur over 18 months, commencing shortly after passage of the legislation. We expect that CapEx to hit both 2021 and 2022. .

We have also resumed some of the projects we have previously placed on hold. The Sugar Factory in Dover is now under construction. We just completed the development of a new restaurant at Twin River in Lincoln, Jerry Longo's Meatballs & Martinis, and that is expected to open as early as next week.

We are also moving forward on our redevelopment plan at Casino KC for approximately $40 million. That project should greatly enhance the property and guest experience, driving growth and a nice return for us on our investment. The Kansas City -- the Casino KC project is largely a 2021 event, but we expect it will finish sometime in early 2022. .

More broadly, we continue to plan, scope and position ourselves for a full return to normal activity levels. At this point, there have been no material changes to the project CapEx plans we discussed last quarter. .

I will now turn it over to Steve. .

Thank you, Marc. First, I'd like to address cash, liquidity and our recent financing transactions. As George mentioned, on October 9, we closed on an incremental $125 million in aggregate principal amount of 6.75% senior unsecured notes due 2027. The new notes were a tack on to our existing 6.75% senior notes due 2027.

We had pretty good timing to take advantage of a robust, high-yield market and in essence, prefund our acquisition of Jumer's, while preserving our strong liquidity position. .

Speaking of liquidity, at September 30, we had cash on hand of approximately $115 million. Pro forma for the $125 million bond offering we just closed and taking into consideration $250 million of available borrowing under our revolving credit facility, our current total liquidity is right about $490 million. .

If you compare that to the outlays we expect from committed acquisitions now under contract in the next 12 months, which is comprised of $25 million for Bally's, $140 million for Shreveport and MontBleu at Lake Tahoe and $120 million for Jumer's, oh, and by the way, 0 for Evansville, we have pro forma liquidity of approximately $200 million.

In addition, we expect to continue to be generating free cash flow from operations, much like we did this quarter, as George mentioned. .

We feel this a very comfortable position. And with all the EBITDA we've picked up, still a very attractive and conservative leverage neighborhood with plenty of dry powder to continue to be an opportunistic player in the M&A market. .

Regarding the Indiana acquisition and GLPI, we often get asked the question on the REIT structure and why we had not participated in such a structure to date. So what makes this transaction different? Essentially, if a debt-free means of significant growth with no cash out of pocket, plus we're picking up the i skins in the exciting Indiana market. .

We're doing this now because, as usual, we're being opportunistic. We like the Evansville market and this particular asset quite a lot. There's limited potential for incoming competition. The skins for Indiana are extremely attractive, and we feel the property will fit into our growth strategy very well. .

In addition to all the details that George mentioned regarding the transaction with GLPI, let me tell you about another angle of thought as we approached this combination of transactions. In essence, we merged with Dover Downs for $97 million of equity in March of last year.

We're retaining approximately $12 million of that EBITDA net of the annual lease payment. So what we're doing is trading the real estate there for an incremental $32 million of EBITDA. So net-net, we're out $97 million of original purchase price in return for $44 million of total EBITDA or an ownership multiple of 2.2x.

Oh, and, by the way, as Marc mentioned, we pick up the very important Indiana skins to supplement our emerging interactive strategy. So we're thrilled about a new partnership with GLPI and those transactions overall. .

the Rhode Island segment, which is comprised of the Lincoln and Tiverton properties; the Southeast segment, which is the Hard Rock Biloxi and Vicksburg properties; the Mid-Atlantic segment, which, for the moment, is only Dover Downs; and the West segment comprised of the Kansas City and Black Hawk properties.

We are still evaluating how we will integrate Illinois and Indiana, and so you may see a fifth Midwest-type segment in the near future. Stay tuned..

Regarding taxes, as we noted last quarter, there are certain aspects of the CARES Act that will benefit us. We continue to benefit from the employee retention credit, which helped the company by $1.2 million in the third quarter.

In addition, we are exploring other aspects of the act, including maximizing NOL carrybacks through tax planning initiatives and taking advantage of the relaxing of the interest deduction limitation.

We believe the overall cash -- positive cash flow to the company over the next year could well exceed the $25 million or $30 million we mentioned on our last earnings call..

As for guidance, consistent with what we noted last quarter, we continue to live in uncertain times, especially in the short term. And while we do not currently anticipate any significant operational interruptions, near-term outcomes are heavily dependent upon COVID-19 and our country's response to it.

As such, we're not able to accurately project results in the short-term and, therefore, continue to refrain from providing specific guidance at this time. .

And one final remark. As evidenced by our new relationship with GLPI, which we're quite pleased with, we will continue to be situationally opportunistic in expanding this company and delivering accretive growth for our shareholders and other stakeholders.

Our leverage remains moderate, our liquidity profile is very strong, and we have considerable unencumbered real estate. That combination is foundational for our ongoing growth ambitions as an omnichannel provider of brick-and-mortar and interactive gaming entertainment to a large and growing customer base. .

And with that, I'll turn it back over to George. .

Thank you, Steve. That concludes the prepared remarks. And we'll now ask the operator to open it up to questions. .

[Operator Instructions] We'll now take our first question from the line of Barry Jonas with Truist Securities. .

So maybe just to start, you've obviously been very opportunistic in M&A at very attractive prices.

But going forward, what would you want to see from a strategic perspective as you start thinking about really amassing a portfolio here? Just what would you want to see in future M&A? What are you looking for?.

Thanks for the question, Barry. This is George. So obviously, we've been pretty effective in the execution of what I'll call a disciplined growth strategy. And quite frankly, have been acquiring properties at reasonable, in some cases, immediately accretive low multiples.

And these properties that we are acquiring, we know based on our operations style, that we'll be able to improve on that from a bricks-and-mortar perspective. .

But following on to that, we've assembled property now in 10 states and have positioned ourselves as what I believe as the most important regional portfolio in states where we have unencumbered sports and -- yes, sports betting licenses and what we feel is the future potential for legislation that's going to make us well positioned for iGaming licenses.

And we're going to continue to add more states as the opportunities present themselves. .

So where we are now is we feel we're in a great position to take advantage of the transformative opportunity presented by sports betting and iGaming, given the access we have to capital and now the broad market access and databases we possess and the newly announced brand that we just acquired on October 13, that we'll be rolling out.

So we're exploring next steps really to deliver what we consider to be the best omnichannel in gaming. And again, under the radar, we've built the foundation to take advantage of this, what we feel is a really incredible opportunity. .

Great, great. And then, Steve, I think in the past, you've talked about some sort of a normalized pro forma run rate EBITDA for the portfolio.

Could you give us an updated number there, I guess, factoring the M&A? But also, if you can give us anything on sports betting, synergies, just curious if there's an updated number there?.

Yes. Barry, we're constructing a portfolio that's got a lot of potential, put it that way. But we are -- let me give you kind of a ballpark for now because as Marc mentioned, our interactive strategy is emerging, and we're quite focused on that. And we're not in a position to quantify that for the Street at this point, Barry. .

But brick-and-mortar basis of the various properties under contract and existing properties on a, call it, a pre-COVID run rate basis, we now view this portfolio in the low $300 million EBITDA neighborhood.

And that's, quite frankly, Barry, before we are able to implement, for example, CapEx at Kansas City, the new casino floor in Rhode Island, a rolling CapEx program in Atlantic City that Marc went through. So there's upside to that number, but that's kind of the baseline figure we're using at this time. .

Got it. And then just maybe I missed this, but your -- in terms of what your -- in terms of leverage metrics, recognizing your comments about still having some dry powder.

Where are you? Or how do you think about where your leverage metric pro forma is around now?.

We think about the world, Barry, mostly in kind of pre-COVID cash flow terms because we believe that, that's -- that will return. And we actually think the post-COVID potential is even higher given the margin experience that we're all seeing across regional gaming industry, particularly this week, that George walked through. So -- yes. .

So that number is currently, I would tell you, on that basis in the low 4s neighborhood. That's where we like it. Historically, we've been low 4s, mid-3s, quite frankly. I think mid-3 is maybe a little bit low as we think about proper shareholder return parameters.

But I think you're going to expect to see us in a kind of mid- to low-4s neighborhood as a desired kind of long-run target. That's where we're comfortable. And supplemented, of course, by high levels of liquidity, which is a strong preference for us for obvious reasons. .

Great. Great. And recognizing you're still developing that interactive strategy with the Bally's brand addition. But anything you can share about how, right now, you think about the opportunity, balanced by the investment required.

I mean I think there are some competitors, pure plays out there who are putting up pretty substantial losses in the near term. So curious if you can share anything early on how you're thinking about the opportunity. .

Well, and I'll let Marc or George pipe in as well. But we are, at this time, pulling together the various pieces of an elaborate puzzle. And we've been in a bit of a land grab mode, and you can see that from the various headlines in our acquisitions under contract, that's a big piece of it.

As George mentioned, we intend to be one of the premier operators nationally of both brick-and-mortar and interactive gaming strategies across sports betting and iGaming, as that becomes more available across the country. .

Look, we have the balance sheet and the liquidity to sustain customer acquisition costs as we go forward in whatever form those might take across the portfolio. Those issues, we're well educated on and building into our portfolio. .

We do believe longer term, as that interactive market -- those interactive markets start to mature, it's going to be important to be nimble around technology and the ability to have one of the most competitive offering, and that's also part of our strategy.

So we're entering this game for the long run, and we factor those costs into our modeling along the way. .

Yes. Let me just add to that, Steve. So Barry, at the end of the day, this is a customer acquisition game. And we feel because of the portfolio that we've built, we have significant database, and it gives us the ability now to integrate land-based database and interactive platforms.

So with our physical property database, we have the ability now to drive down customer acquisition costs. We think that's a metric that's going to be beneficial in the long term. And this is a significant part of building the omnichannel that we're talking about, which I mentioned earlier. .

Your next question comes from the line of John DeCree with Union Gaming. .

John, you might be on mute. .

Can you hear me now?.

Yes, John, we can hear you. .

Congratulations on the recent acquisition announcements. Perhaps, let's start there. And I guess we kind of look at your news every kind of Monday morning, it seems like Twin River has another interesting and strategic announcement to make. And I've got to imagine there's some competition for the acquisitions that you guys have successfully announced. .

And yet Twin River continues to kind of get ink on the paper and still pay with a pretty attractive entry multiples on the surface and then with even improved in some of the financial moves you've made.

So I guess my question, George or Steve, is what do you attribute to your success in this environment over the last 6 or 10 months to kind of continue to find deals to do and grow at reasonable prices. .

So I'll take the first crack at that, Steve. So a big part of this has to do with kind of how we were prepared pre-COVID. We tended to have a -- favor a lowly levered -- low leverage and high levels of liquidity. That put us in a really great position when opportunities arose.

And then as a result of the consolidation -- or I mean, the acquisition of Caesars with Eldorado, that just provided us with opportunities. .

And since we were embarking on our strategy of accumulating states primarily for our interactive strategy, it just put us in the right position to get deals done. And now they know that we have the ability to bring these deals across the finish line, we have more opportunity or access to these types of arrangements.

Steve, I don't know if you want to add anything to that. .

Well, that's exactly right, George. John, the other thing I would mention is we're -- I think we're harvesting some of the fruit of a strategy that the Board intended to implement going -- a couple -- a few years back. I think we said this before, but listen, I think we're -- I think we find ourselves in the sweet spot and we're there deliberately..

What I mean by that is, back in the day, as you well know, John, there were lots of kind of SMID-cap regional players. There was Aztar and Ameristar and Pinnacle and Columbia Sussex and you know all those names. And this industry has consolidated, and those names are gone.

And so the regional players are big players and somewhat less interested in some of the properties that we've had an opportunity to pick up. The other players tend to be much, much smaller than that, perhaps private, less access to capital, depending. .

So we've kind of floated right up into that, what I think of as a sweet spot. Able to move the needle on growth with properties that some players are less interested in and other players can't get access to.

And all the while building the size and the financial wherewithal to play the game at a bigger level, which is where -- kind of where we find ourselves now. .

So I think, John, it's a combination of we're in the right place at the right time on the one hand, and then what George said, which is kind of preparedness and leaving no stone unturned on M&A opportunity on the other hand. But it's a very good question, John. Thanks. .

Okay. And congratulations on the success so far. Maybe to switch gears to the kind of budding sports and iGaming strategy. And I realize there's probably not a ton you guys can say on this one, but I'll try to ask it anyway. .

When we look at some of the agreements you've reached with third parties, like FanDuel and PointsBet, we kind of look at these types of agreements as kind of rev share to the license provider, in this case, you guys. Wondering if you could give us any kind of high-level general color across your kind of portfolio of third-party agreements.

Is it a revenue share? Are you guys getting kind of fees upfront? How do we think about, in general, your kind of partnerships with those third parties in the sports and iGaming space? And how it kind of accretes to your financials?.

Sure, John. I'm going to turn this over to Marc to answer. .

Thanks, John. So obviously, we don't go into details with any one of the specific contracts, but it has been our strategy to try and partner with the likes of DraftKings and FanDuel wherever we can and then other players and then also retain a skin for ourselves. .

Generally speaking, those deals are on market-type terms. So you should think about it in terms of rev shares with some minimum annual guarantees, some other considerations market by market. It is accretive day 1. There's very little investment required by us other than in some of the hard costs when we're doing the sports books.

And we're going to continue to do deals like that, but we don't really get into the specifics of any one deal. .

Yes. That's fair enough. And one last housekeeping item, perhaps, Steve, for you.

Could you give us a sense of what kind of run rate maintenance CapEx might look like on the kind of portfolio that's being acquired today? I know a lot of those buildings haven't closed yet, but I think you've mentioned to Barry's question, maybe about $300 million of EBITDA.

What would be a good range for maintenance CapEx, if you could take a guess now?.

Well, John, that's a good question. That's a pretty long list of new properties, frankly. So rather than go through that with you online, let me take you off-line and we'll talk about that post facto, if you don't mind. .

[Operator Instructions] Your next question comes from the line of Chris Sinnott with Cowen. .

Congrats on a great quarter here, all circumstances considered. My one question has to do with the difference between margins, this great margin performance you got at the consolidated company level versus margins just looking at the gaming floor itself.

Because when I look at the $26 million or so in gaming and racing expenses for 3Q '20, that's about the same as the $26 million that we got in 3Q '19, but it's on a lower sales amount. So it almost looks as if the margin got worse. .

Just optically, I'm curious if that's something going on at the gaming level. Or maybe that just reflects the inclusion of new, acquired properties with a different margin structure. So if you could talk about those dynamics, that would be helpful. .

Well, I don't know exactly what you're looking at. But certainly, we've added more properties to our portfolio, so that would have an impact. We do know in Rhode Island, it was -- which is taking down the margins because of the existing protocol for COVID that that's having a little bit of impact.

But same-store margins are up 6 -- I believe they're up about 6.5%, 6.5 -- 6,500 basis points -- 650 basis points, I'm sorry. And that, net of the new properties that we've added, I think we're up about 500 basis points. .

So we're certainly seeing a flow-through from margin improvements. And we can get into what we see, but I'd have to see kind of what you're looking at. But Rhode Island and Delaware for the most part are a little bit of a, I'll call them outliers when you look at -- when you compare them to the industry.

Because the -- you don't use GDR, you use net of the tax impact. So the net revenues are way lower for comparative purposes. So that would have some impact to skew that margin. .

And your next question comes from the line of Adam Seessel with Gravity. .

I've got a two-part question. I wonder about your 14 million customers, pro forma and your database.

Where are you in organizing the database now, the existing program? Do you have a loyalty program? Will you get a loyalty program? And how long will it take to get that database in order to go after the customer acquisition for sports betting, iGaming and also for a loyalty program?.

Sure. So I'll take the first crack at that. So we do have loyalty programs at every one of our properties that are maintained. But it's not a one brand or a national brand at this point. That's part of the reason why we went out and acquired the Bally's brand.

So we are going to be going through a process to develop a plan that will fully integrate the brand in all our properties as well as all our interactive technologies for sports betting and iGaming. So that brand will be across all those platforms. But we're not going to just be slapping a name on a building per se.

We're going to -- we want to be in a position to deliver the promise of the Bally's brand. So we're going to roll out property standards, services, one card systems, product. And we'll launch that at each of the properties when we're sure we can deliver on that promise. .

Do you have a sense of how long it will take? And what it will cost to get it done?.

We've explored opportunities in the past to incorporate this. So we understand, from a technology perspective, how to handle it. But this is something that's going to probably be rolled out over the next 12 months to maybe even 18 months period of time. .

Excellent. And in terms of -- once you get this national Bally's brand established, then the database up and the loyalty program up, what are the chances you could do a deal with Bally's Las Vegas to sort of create a synthetic hub and spoke.

Even though they're under different ownership, they own the same -- they have the same brand, and no one will know the difference.

Is that something that could potentially be in the cards between you and Caesars?.

That would be -- I would say that, that would be situational in nature. I mean ultimately, we would be creating our own brand, one brand. And as far as Vegas is concerned, they have the rights to that name only through the period of time where they dispose of that asset or sell that asset. So... .

Right. I'm talking about -- the Eldorado made a big deal about saying that when they did the deal with Caesars, that they could use loyalty points to drive -- or the enticement of trips to Vegas to drive casino visits at the regionals.

Is there something you could do with that with Bally's Vegas?.

Yes. I mean listen, again, it's situational in nature. We're not exploring those types of relationships. And we feel, from a portfolio perspective, that we have more destination-type markets than we have had historically with the adding of AC, with the adding of Lake Tahoe, and we've utilized it in the past with our Hard Rock property in Biloxi.

So we think we have more than enough cross opportunities, cross-marketing opportunities. So we're not going to get into that type of relationship. .

And at this time, there are no questions. I'll turn the call back over to George Papanier for additional closing remarks. .

Okay. Well, thank you, operator, and I want to thank you all for joining our call today. And hope you have a good day and weekend. Thank you. .

This does conclude today's Twin River Worldwide Holdings Third Quarter 2020 Earnings Call. Please disconnect your lines at this time, and have a wonderful day..