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Edited Transcript of CZR earnings conference call or presentation 5-Nov-19 10:00pm GMT

Q3 2019 Caesars Entertainment Corp Earnings Call

LAS VEGAS Nov 21, 2019 (Thomson StreetEvents) -- Edited Transcript of Caesars Entertainment Corp earnings conference call or presentation Tuesday, November 5, 2019 at 10:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Anthony P. Rodio

Caesars Entertainment Corporation - CEO & Director

* Eric Hession

Caesars Entertainment Corporation - Executive VP & CFO

* Joyce Arpin

Caesars Entertainment Corporation - VP of Finance & Assistant Treasurer

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Conference Call Participants

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* Carlo Santarelli

Deutsche Bank AG, Research Division - Research Analyst

* Harry Croyle Curtis

Nomura Securities Co. Ltd., Research Division - MD and Senior Analyst of Gaming, Leisure & Lodging

* Jeffrey Austin Stantial

SunTrust Robinson Humphrey, Inc., Research Division - Associate

* Shaun Clisby Kelley

BofA Merrill Lynch, Research Division - MD

* Thomas Glassbrooke Allen

Morgan Stanley, Research Division - Senior Analyst

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Presentation

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Operator [1]

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Hello. And welcome to today's webcast. My name is Christina, and I will be your event specialist today. (Operator Instructions) Please note that today's webcast is being recorded. (Operator Instructions)

It is now my pleasure to turn today's program over to Joyce Arpin, Senior Vice President of Finance and Treasurer. Joyce, the floor is yours.

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Joyce Arpin, Caesars Entertainment Corporation - VP of Finance & Assistant Treasurer [2]

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Thank you. Good afternoon, and welcome to the Caesars Entertainment Corporation Third Quarter 2019 Earnings Conference Call. Joining me today from Caesars Entertainment are Tony Rodio, Chief Executive Officer; and Eric Hession, Chief Financial Officer.

A copy of the press release, earnings presentation slides and a replay of this conference call are available in the Investor Relations section of our website at caesars.com. Also, please note that prior to this call, we furnished a copy of the earnings release to the SEC in a Form 8-K, and we'll file our Form 10-Q.

Before we get underway, I would like to remind you to reference Slides 16 through 21. These slides include forward-looking statements, safe harbor disclaimers and definitions of certain non-GAAP measures.

Our comments today will include forward-looking statements as defined by the Private Securities Litigation Reform Act. Forward-looking statements reflect our expectations as of today's date, and we have no obligation to update or revise them. Actual results may differ materially from those projected in any forward-looking statements due to unanticipated hold fluctuations, weather or other unforeseen circumstances that we cannot control. There are certain risks and uncertainties, including those disclosed in our filings with the SEC that may impact our results.

In addition, note that Caesars Entertainment closed on the acquisition of Centaur Holdings in the third quarter of 2018 on July 16. Therefore, U.S. GAAP results do not include Centaur Holdings prior to the acquisition in the third quarter of 2018, unless otherwise stated. Note that hold-adjusted results reflect hold versus our expectations. You can find reconciliations of GAAP and non-GAAP figures starting on Slide 10.

I will now turn the call over to Tony.

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [3]

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Thank you, Joyce.

I'll provide a quick overview of our third quarter performance and recent developments before turning the call over to Eric to discuss the results in greater detail.

First, a quick update on the merger with Eldorado. We filed our definitive proxy on October 11, and the shareholder votes for each of the companies will occur on November 15. We've made significant progress on the integration planning, and we remain on track to close in the first half of 2020.

Turning to the results. Third quarter net revenues totaled $2.24 billion, up 2.3% year-over-year, driven by growth across all of our business verticals and favorable hold in Las Vegas. Net revenues grew 0.7% year-over-year adjusted for hold. Solid consumer demand in Las Vegas drove the higher revenues as we saw increased slot and table volumes, including an 18% increase in baccarat volumes and an increase in hold -- in hotel occupancy and ADR.

Third quarter adjusted EBITDAR totaled $638 million, up 6.3% year-over-year, driven by revenue growth and corporate expense reductions in payroll, professional services, legal expenses and risk management. Adjusted EBITDAR margins expanded 100 basis points year-over-year to 28.5%.

We're very pleased that we were able to deliver these strong results in the third quarter despite headwinds across our portfolio, including road closures in Indiana, which impacted visitations at Hoosier Park and Indiana Grand. Also the temporary closure of The Colosseum at Caesars Palace and rooms at Harrah's Las Vegas for renovation and a decrease in demand at our London properties.

On a trailing 12-month basis, our domestic marketing costs represented 20.1% of gross revenue, reflecting a 20 basis point improvement in marketing efficiency year-over-year, while labor cost represented 23.4% of gross revenue, reflecting a 60 basis point improvement in labor efficiency.

In September, we announced an agreement to sell the Rio for $516.3 million. The sale of this asset allows us to focus our capital resources on strengthening our portfolio of the Las Vegas Strip properties and is expected to result in incremental EBITDAR growth at those properties. Importantly, we continue to have more marketing rights to our valuable Caesars Rewards customers and will retain hosting rights to the World Series of Poker. We expect to close the sale by the end of 2019, subject to customary closing conditions. Per the sale agreement, we will continue to operate the Rio for a minimum of 2 years pursuant to a lease agreement to be signed at closing, and the property will remain part of the Caesars Rewards network during that lease period.

We continue to grow our sports betting business across the third quarter and are pleased with the progress we've made over the past year. We've recently expanded Caesars sportsbooks to Iowa and Indiana and now have Caesars-branded sportsbooks across 29 locations in 7 states: Nevada, New Jersey, Pennsylvania, Mississippi, Iowa, Indiana and New York. Mobile sports betting is already live in Nevada and New Jersey, and we expect to launch in Pennsylvania, pending regulatory approval. The new sportsbooks are driving increased visitation and customer engagement across our portfolio. And we expect sports betting to be a key value driver for the company over the coming years.

Now I'll turn the call over to Eric to review our financial results in more detail before getting to your questions.

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Eric Hession, Caesars Entertainment Corporation - Executive VP & CFO [4]

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Thank you, Tony. Please note that our consolidated results include Centaur, unless otherwise stated.

As Tony mentioned, Las Vegas results were strong in the third quarter. Net revenues totaled $973 million, up 6.9% year-over-year due to strength across all business verticals from favorable customer demand. Gaming revenues increased 17% due to $37 million of favorable year-over-year hold and increased gaming volumes. Total gaming volumes increased 2% year-over-year. Table volumes were up 2.5%, led by baccarat up 18%. And slot volumes were up 1.7%.

Las Vegas cash hotel revenues grew 8.1% year-over-year, making the highest third quarter Las Vegas cash hotel revenue in company history. Recall that we also achieved similar records in Q1 and Q2 of this year. Occupancy increased 290 basis points to 95.6%, and RevPAR increased 7% to $140. We experienced strong growth in the room nights from the group segment and from direct bookings on our website in the leisure segment. We continue to see a healthy consumer environment in Las Vegas and expect hotel demand to remain strong throughout the remainder of the year, specifically with cash-paying customers.

Food and beverage cash revenues increased $5 million or 2.5% year-over-year primarily due to higher hotel occupancy levels and recent enhancements we've made to our offerings. Caesars Palace saw the largest increase driven by the new Vanderpump Cocktail Garden and other premium outlets like Hell's Kitchen. Las Vegas EBITDAR totaled $356 million, up 16% year-over-year or up 4.5% on a hold-adjusted basis. EBITDAR margins expanded 290 basis points to 36.6% driven by the solid revenue growth.

Turning to the Other U.S. segment. Net revenues totaled $1.12 billion, down 0.5% as approximately $25 million of favorable impact from 2 additional weeks of Centaur results versus the prior year period was offset by unfavorable hold of $11 million year-over-year and increased competition in Atlantic City and Southern Indiana. In addition, construction disruption as we moved our casino from a boat to a land in Southern Indiana impacted results. This move is expected to be complete in December.

Other U.S. EBITDAR declined 1.9% to $304 million due to the decreases in revenues but was up 1% to $309 million on a hold-normalized basis. EBITDAR margins contracted 40 basis points to 27.2%. On a hold-normalized basis, our Atlantic City properties EBITDAR was flat year-over-year.

Our All Other segment, which includes unallocated corporate expenses, managed properties and our international operations, had net revenues of $144 million, down $6 million or 4% year-over-year primarily due to decreases in table games volumes at our international properties. All Other EBITDAR loss increased $5 million to a loss of $22 million due to lower performance at our London Clubs operations, which was partially offset by a reduction in corporate expenses year-over-year. As Tony noted, we reduced payroll, IT and professional services expenses in the quarter.

Looking ahead, our outlook in Las Vegas remains positive based on future demand indicators and results we've seen to date. In the third quarter, visitor volumes to Las Vegas increased 0.6%, convention attendance increased 8.3%, and deplaned passengers increased 3.9%. In the fourth quarter, we expect continued low single-digit revenue growth, in line with year-to-date hold-normalized growth trends, and we expect margins to improve slightly year-over-year. We view the overall demand environment as stable and modestly growing, led by nongaming segments. Recall that we faced lower leisure demand in the latter half of last year and tapped our database to stabilize occupancy. This year in the fourth quarter, we're seeing stronger demand from cash-paying customers, which will increase hotel cash revenues year-over-year. We're also seeing a strong quarter in group bookings, and we expect double-digit growth in room nights and high single-digit growth in group revenues for the fourth quarter.

Next year, we anticipate an acceleration in Las Vegas, led by our CAESARS FORUM convention center, which is scheduled to open in March. CAESARS FORUM already has over 1.1 million room nights booked and $390 million in revenues through 2026, 75% of which are in the first 3 years of operations. Total bookings for the FORUM in 2020 are currently over $90 million, well ahead of our expectations.

In the Other U.S. segment, we anticipate net revenues to grow low single digits and margins to improve slightly year-over-year in the fourth quarter with Centaur remaining a strong overall growth driver despite annualizing the acquisition in the third quarter. We expect to continue to extract additional synergies and expect a positive lift in the fourth quarter from the recent legalization of sports betting in Indiana. Additionally, the expected December completion of the Southern Indiana boat-to-land project marks the end of an 18-month renovation and rebranding effort to transform the property into a premier Caesars asset.

In the All Other segment, we expect to generate a larger operating loss for the full year compared to 2018 due to investments in technology infrastructure, our sports sponsorships and weakness in our international business. In the fourth quarter, we expect sports investments to increase, which will be partially offset by labor savings.

From a liquidity perspective, we ended the quarter with approximately $1.3 billion in cash. As of September 30, our total revolver capacity was $1.2 billion with 0 drawn. In the third quarter, we spent $106 million in same-store CapEx and $78 million in development CapEx. During the quarter, we also used excess cash to voluntarily repay $250 million of the CEOC term loan, bringing the balance down to $1.2 billion and our enterprise-wide gross lease adjusted leverage down to 5.8x. Excluding the convertible notes and capitalizing our lease payments at 8x, our net leverage stands at 5.2x.

For cash CapEx in 2019, we now expect a range of $400 million to $420 million in maintenance, which includes room renovations at Harrah's Las Vegas. We expect to spend approximately $275 million to $295 million for development-related CapEx, mostly from the CAESARS FORUM project and our investments in sportsbooks across the U.S. This range excludes spend for the Korea project which we're currently evaluating.

Before we open the call for questions, please note that the purpose of today's call is to discuss our third quarter performance. While we look forward to answering any questions you have about Caesars, for more information regarding the proposed merger with Eldorado, please refer to our filings with the SEC.

Operator, we'll now open the call for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from Carlo Santarelli from Deutsche Bank.

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Carlo Santarelli, Deutsche Bank AG, Research Division - Research Analyst [2]

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Tony, if I could, you obviously talked a lot on the last call about some of the efforts that you guys have collectively made in terms of cost reduction. And obviously, based on the performance in the quarter, it seems that some of that stuff is flowing through. To the extent you can kind of talk about where you are in that process and what you're kind of targeting at this stage and a time line for it, I think that would be very helpful.

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [3]

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Okay. Thanks, Carlo. Yes. On the last quarterly call, I think I had mentioned that it was my goal to take $25 million to $50 million worth of cost out of the business by the time we got to the closing of the transaction. I'm happy to say today that I would now make that estimate somewhere between $75 million to $100 million. And I think it's going to be on the higher end of that, and it comes in a variety of buckets. From a property standpoint, we've eliminated a number of slot participation games across the whole portfolio. We've also reduced consultants and outside contractors and professional services. We've suspended our international efforts and pursuits for licenses in Japan and other jurisdictions. And then just natural attrition particularly here at corporate as people have left, we take a very cautious approach about filling those positions. We don't want to hire people into harm's way if it's a position that may be part of a larger synergy down the road.

And then lastly, a few weeks ago, we launched a voluntary severance program, which we had approximately 50 people raised their hand here at corporate, which again allows us to eliminate the cost between now and the closing. But we were able to allow them to take the benefits that they would have gotten if they had stayed through closing. So I think it was a win-win for everybody. So again, I would say now it's about $75 million to $100 million. And then we are beginning to see it flow through, but I think you'll see more of the flow-through as we get into the first quarter because a lot of those voluntary severances, they will be allowed to accept them over the course of the next couple of months.

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Carlo Santarelli, Deutsche Bank AG, Research Division - Research Analyst [4]

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Great. And then something a little bit more detailed, I guess, probably best for Eric. You talked about it a little bit in the prepared remarks. When you -- based on kind of prior experience, and I know you guys have done this before, but with respect to the Southern Indiana boat, obviously during the disruptive period here, we've certainly seen from a gross revenue perspective some decline. Can you talk a little bit about the impact that you foresee on a year-over-year basis, maybe to the extent you can, EBITDA, even if it's on a percentage basis, just in terms of the uplift you foresee from the cost saves as well as what you would expect to be a stronger revenue performance?

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Eric Hession, Caesars Entertainment Corporation - Executive VP & CFO [5]

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Yes. It's a great question. And we do have experience as we've moved other properties from the boat to land. There are 2 real drivers. One is on the cost side, you no longer have to maintain the boat, which includes sometimes captains and dredging expenses and so forth. And so the downside of the project from a return standpoint is really limited, and you can get about a 6% to 8% return simply by looking at the costs that you're pulling out of the business by moving from boat to land.

Then on the other side, you create a much better environment for your customers, both from their field perspective and also from the gambling perspective of the casino. And what we'll typically see there is another kind of 5% to 10% change. So we target around a 15% return on these projects, and I have no reason to expect that we wouldn't be able to get that.

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [6]

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And the only color I would add to that as well, there is a little bit of noise in that market given the competitive effect of a derby...

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Eric Hession, Caesars Entertainment Corporation - Executive VP & CFO [7]

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Kentucky VLTs.

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [8]

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Kentucky VLTs. Thank you.

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Operator [9]

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Your next question is from Thomas Allen from Morgan Stanley.

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Thomas Glassbrooke Allen, Morgan Stanley, Research Division - Senior Analyst [10]

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So big news in the quarter was you selling the Rio. Can you just talk about what kind of lost EBITDA you think that, that's going to generate for Caesars?

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [11]

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Well, I mean I think we anticipate being able to maintain the vast majority of that. I don't know, Eric, if you have an exact number in terms of what our forecasts were. But we're -- but the ability to retain World Series of Poker, being able to retain our Caesars Rewards customers and still managing the property for the next 2 years, we think that a lot of that business is just going to be transferred over to our other 8 properties in Las Vegas.

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Thomas Glassbrooke Allen, Morgan Stanley, Research Division - Senior Analyst [12]

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Okay. And then on Atlantic City, you mentioned in your prepared remarks, I believe you said that hold-adjusted EBITDA was flat in the quarter. How did that compare to expectations? And kind of what's the outlook for AC segment going forward?

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [13]

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Look, my expectation is that we begin to turn that around. I mean, Atlantic City, certainly for the last number of quarters and since the new competition opened, has been going in the wrong direction. And before you can turn something around and move it in the right direction, first, you have to stop the decline. And I think we've accomplished that.

We are testing some new marketing initiatives that are more targeted towards specific customers, decliners, inactives and customers that we feel we've lost market share to our competitors. So I'd like to think that we're going to be able to show improved trends there over the balance of the fourth quarter and more importantly into 2020.

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Operator [14]

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Your next question is from Shaun Kelley from Bank of America.

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Shaun Clisby Kelley, BofA Merrill Lynch, Research Division - MD [15]

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You guys gave some great color on just the overall Las Vegas operating environment and maybe some of the core or future KPIs. I was wondering if you could do a little bit of the same for just sort of the regional markets.

I think, Eric, you mentioned -- or maybe it was you, Tony, a little bit about Centaur, some of the progress there. Is that and kind of Southern Indy going to be the primary drivers for growth in 2020? Any other pluses and minuses? And just what are you seeing broadly speaking in terms of the -- call it, the core regional consumer at this point?

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [16]

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I mean I think, number one, the upside at the 2 Indy properties is a result of the Phase 1 of tables coming online, and we do think that we'll see growth there in a couple of phases because we're not going to be able to fit as many table games into either of those businesses as we would like. So the second phase will have to include an expansion of the buildings. But certainly upside at the Indy properties in 2020.

The boat to land, as you mentioned, is also going to be a driver. We think that we're going to continue to have upside as sports betting continues to spread across the country. And then probably not in 2020, but New Orleans, we view as a lot of upside with the extension of our lease and the $325 million that we're going to deploy there that we have to deploy by 2024, additional rooms there. We run at 100% occupancy. We buy 30,000 to 50,000 rooms from nongaming hotels in the market, and we have somewhere in the vicinity of 100,000 [we've rented there now] every year. So we have a lot of upside in New Orleans. But again, that probably won't be 2020.

As far as the headwinds, there are definitely some competitive headwinds. Philly Live is expected to open not for the latter part of 2020, but that will affect both Philly and AC. We've got gaming expansion in Arkansas and Oklahoma. And then the VGT expansion continues in Illinois as well as the historical racing games in Kentucky.

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Shaun Clisby Kelley, BofA Merrill Lynch, Research Division - MD [17]

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Great. And then sort of your latest update on the direct marketing side and what you -- and some of the reductions you've been able to deploy there, just kind of where are we in your -- kind of your general strategy there? Is that going to be sort of modest incremental improvement from here or sort of any kind of new programs or initiatives that you're excited about, understanding that it's a bit of a transitional period to roll out anything to now?

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [18]

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Yes. I think that it's more continuing to do business as usual. I think the guys here, the marketing team have done a fantastic job with -- there's always some exceptions and outliers. And again, I referenced Atlantic City as one of those, where I think that we kind of weren't as aggressive as we should be in the face of the new competition. So by and large, across the other regional markets in Las Vegas, we are continuing to test new programs. We're even doing some testing here in Las Vegas. But there's not going to be a wholesale dramatic change to our marketing approach from a direct marketing standpoint.

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Operator [19]

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Your next question is from Harry Curtis from Nomura Instinet.

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Harry Croyle Curtis, Nomura Securities Co. Ltd., Research Division - MD and Senior Analyst of Gaming, Leisure & Lodging [20]

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You guys had mentioned the favorable hold in the Other sector of about $11 million. So does that imply the favorable hold impact in Vegas was around $26 million?

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Eric Hession, Caesars Entertainment Corporation - Executive VP & CFO [21]

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No, it was the other way, Harry. Sorry, we had a negative hold of about $11 million, that's on a year-over-year basis in the regions, and then positive of $37 million in Vegas, so a net positive of around $25 million for the company.

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Harry Croyle Curtis, Nomura Securities Co. Ltd., Research Division - MD and Senior Analyst of Gaming, Leisure & Lodging [22]

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I see. I misunderstood.

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [23]

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And if I could just add some color on the Las Vegas results because I don't -- we definitely had a favorable hold. But I don't want that to minimize the tremendous results that we had across the whole portfolio in Las Vegas.

As Eric mentioned in his comments, for the third straight quarter, we had record hotel cash revenue. And you would think that would come at the expense of gaming volumes because we're putting more cash customers in the room. But we were able to grow our slot volume and our table volumes by 2%, our baccarat volume by 18%. Our food and beverage revenues continue to escalate, and we continue to do very well from an entertainment standpoint. Overall, because of the closure of The Colosseum for 2 months, it wasn't quarter-over-quarter up. But on event-by-event basis, it was up. And we just had, for example, Guns N' Roses in The Colosseum. And with the changes that we made to the facility, it's a great customer experience. We're able to do more throughput in terms of beverage sales. And it's -- the bookings for next year are very exciting to look forward to from an entertainment standpoint.

So I think overall, Las Vegas is just -- I think we're doing extremely well.

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Harry Croyle Curtis, Nomura Securities Co. Ltd., Research Division - MD and Senior Analyst of Gaming, Leisure & Lodging [24]

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Yes. We agree with that. I did want to sneak in another follow-up question, particularly as it pertains to the 18% lift in baccarat, which is kind of an outlier. Do you think that you guys were taking share? Or do you sense that there's a stabilization in the baccarat market? What do you think accounts for the outperformance other than brilliant management?

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [25]

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Well, I agree with that, but it's not from my standpoint. The first and foremost, I want to give credit to the management team here at Caesars Palace. They've done a great job, them and their Asian marketing team, cultivating and creating relationships with that business. As a matter of fact, they're just coming back from a business trip over there to do just that very thing. I think also the capital dollars that we've deployed at our -- with our villas, those experiences, I think, are second to none. I don't know what the exact numbers are. I'd have to believe that, that 18% is a bit of a steal of share as well as growth. But I think it comes mostly from the senior management team here at Caesars Palace and the Asian marketing team.

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Harry Croyle Curtis, Nomura Securities Co. Ltd., Research Division - MD and Senior Analyst of Gaming, Leisure & Lodging [26]

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And last question, just turning to sports betting. So far in the 29 books that you've got operating and then the mobile live in New Jersey and Nevada, how much accretion, if any, or how close are you to EBITDA accretion as a result of sports betting? And maybe you could delineate between those states that have mobile and those who don't -- which don't.

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [27]

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Sports betting, in and of itself, is certainly driving incremental EBITDA. But I think that that's the smallest component of what we're benefiting from as a result of the sports betting legislation.

If you look at a property like Hammond leading up to us opening the sportsbook, our revenues for the few quarters before that had been down 1 point or 2. In the 2 months since we've opened the sportsbook, our revenues are up around 4%. We're seeing significant lift in our food and beverage sales. We're seeing a significant lift in foot traffic. Our gaming volumes are up as a result. So yes, we're making money on sports betting by itself, but we're making even more money because of all the traffic it's creating.

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Eric Hession, Caesars Entertainment Corporation - Executive VP & CFO [28]

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Yes. And we're seeing it across the board. If you look at the books that we opened in Iowa, if you look at the ones in Mississippi and in Indiana, they're all having a similar effect, some of larger magnitude than others. But there's no question that they're definitely influencing customer visitation trends and have a direct impact on the amount of food and beverage that we're selling.

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Operator [29]

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Your next question comes from David Katz from Jefferies.

We'll move on to Barry Jonas from SunTrust.

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Jeffrey Austin Stantial, SunTrust Robinson Humphrey, Inc., Research Division - Associate [30]

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This is Jeff Stantial on for Barry. Just curious, you mentioned some puts and takes earlier for 2020. I just want to get your thoughts on the competition coming online later in the year in Indiana with the Gary project and then thinking through into later next year, into 2020 and beyond with some of the new builds in Illinois. Just curious on your thoughts on those.

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [31]

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Well, certainly, I think that those are also headwinds as well. I mean I think the good thing is there appears to be some political uncertainty about the gaming property and the licensing in Downtown Chicago, which I think would have the greatest impact. I don't know if we forecasted the impact on Gary, but it certainly is going to be a little bit of a headwind. And the expansion of adding -- going from 5 to 6 VGTs in Illinois is going to impact our businesses beyond Gary, but I mean, Hammond, Joliet as well as Metropolis. I think the bigger impact on the VGTs isn't the sixth unit. I think the bigger impact is that customers can wager more and win more. I think it makes it a more compelling and enticing product for people that just want a convenient gaming option.

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Eric Hession, Caesars Entertainment Corporation - Executive VP & CFO [32]

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The only thing I'd add to that is broadly speaking, when we look across the entire portfolio and we're in the middle of our plan process for next year, we do see less competitive disruption this coming year than what we've experienced this year and the prior year. It just happens to be concentrated in the markets that you called out. But broadly speaking, it's less than in prior years.

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Operator [33]

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Thank you to all our participants for joining us today. We hope you found this webcast presentation informative. This concludes our webcast. You may now disconnect. Have a great day.