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Edited Transcript of CZR earnings conference call or presentation 25-Feb-20 10:00pm GMT

Q4 2019 Caesars Entertainment Corp Earnings Call

LAS VEGAS Mar 6, 2020 (Thomson StreetEvents) -- Edited Transcript of Caesars Entertainment Corp earnings conference call or presentation Tuesday, February 25, 2020 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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* Barry Jonathan Jonas

SunTrust Robinson Humphrey, Inc., Research Division - Research Analyst

* Carlo Santarelli

Deutsche Bank AG, Research Division - Research Analyst

* Daniel Brian Politzer

JP Morgan Chase & Co, Research Division - Analyst

* David Brian Katz

Jefferies LLC, Research Division - MD and Senior Equity Analyst of Gaming, Lodging & Leisure

* Harry Croyle Curtis

Instinet, LLC, Research Division - MD and Senior Analyst of Gaming, Leisure & Lodging

* Shaun Clisby Kelley

BofA Merrill Lynch, Research Division - MD

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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). It is now my pleasure to turn today's program over to Joyce Arpin, Senior Vice President of Finance and Treasurer. 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 Fourth Quarter and Full Year 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 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-K.

Before we get underway, I would like to remind you that today's conference call will contain forward-looking statements that we are making under the safe harbor provisions of federal securities laws. The company's actual results could differ materially from the anticipated results in those forward-looking statements. In addition, we may discuss non-GAAP measures.

Please refer to Slide 21 through 26, which include forward-looking statements, safe harbor disclaimers and definitions of certain non-GAAP measures. And slides 12 to 16, which include tables reconciling GAAP and non-GAAP figures.

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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Thanks, Joyce, and thanks, everyone, for joining. We have what we believe is a really good story, and we're excited to share it with everybody. I'll provide a quick overview of fourth quarter and full year performance and recent developments before turning the call over to Eric to discuss our results in greater detail. First, an update on the merger with Eldorado.

On November 15, stockholders from both Caesars and Eldorado approved the merger of our 2 companies. Additionally, we received regulatory approvals from a number of jurisdictions and are making progress toward obtaining approvals from other jurisdictions in the coming months. We continue to make progress on the integration planning and expect to close the transaction in the first half of 2020.

Now the results. Caesars delivered another strong year of operating performance. Starting with the fourth quarter, net revenues totaled $2.2 billion, up 2.6% year-over-year, driven by strength in Las Vegas and growth across all regions, primarily in Iowa and Indiana due to the opening of new sportsbooks.

Solid consumer demand in Las Vegas resulted in higher revenues, primarily within our hotel segment as we saw a higher cash customer mix versus the prior year and an increase in occupancy.

Adjusted EBITDAR was $586 million, up 3.4% year-over-year, driven by revenue growth and corporate expense reductions in payroll, professional services and legal expenses. Excluding the sale of Rio, adjusted EBITDAR totaled $575 million, up 4% year-over-year. Adjusted EBITDAR margins expanded 20 basis points year-over-year to 27%.

For the full year, enterprise-wide net revenues were $8.7 billion, up 4.2% year-over-year, driven by strong performance and favorable hold in Las Vegas and a full year of Centaur results.

Adjusted EBITDAR totaled $2.42 billion, up 4.7% over the prior year. Hold-adjusted EBITDAR was $2.4 billion, up 2.9%. Our domestic marketing costs were 20% of gross revenue, reflecting a 10 basis point improvement year-over-year. While labor cost represented 23.4% of gross revenue, reflecting a 30 basis point improvement.

As a result of our focus on cost controls, we've removed approximately $100 million of annualized expenses since the start of 2019. We're very pleased that we were able to deliver these strong results across the year 2019. We also closed the previously announced sale of the Rio in Las Vegas to Dreamscape companies in December and received $470 million in cash.

In January, we announced the sale of Harrah's Reno to CAI Investments for $50 million of net proceeds, which will be split 75% to VICI and 25% for Caesars.

In addition, the capital investments we made over the last few years have paid off as we're seeing good results from these various projects. Since installing table games at both Centaur properties and opening Southern Indiana's new land-based property, all 3 have increased gross gain revenue by 30% to date, tracking well ahead of our expectations.

We're also excited about the opening of Caesars Forum here in Las Vegas in March, which has exceeded bookings and revenue expectations to date. For its first full year of operation, Caesars Forum has already booked over 240,000 room night and $100 million in revenue. We also booked more than 1.3 million room nights, representing $460 million in revenue so far through 2026.

We also continue to grow our sports betting business across the quarter and are pleased with the progress we've made over the past year. We now have 29 Caesars branded sportsbooks across 7 states.

As a result of these installations, we have seen an increase in visitation, food and beverage and gaming volume, particularly in Iowa, Indiana and Mississippi.

We have licenses approved to launch mobile sports betting in Pennsylvania, Indiana and Iowa and plan to do this over the course of the first half of this year, subject to regulatory approval. We reiterate our view of sports betting as being a key value add for the company and we anticipate expanding our footprint to more markets over time.

As we look through the first quarter of 2020, we are seeing an acceleration of the performance that we saw in 2019. Las Vegas is performing very strong with gaming volumes exceeding our expectations, up 9% in January and non-gaming generating solid performance as we continue to see strong customer demand. In addition, our regional properties continue to perform well due to the addition of sports betting and capital investments I mentioned earlier and our focus on cost controls.

Now I'll turn the call over to Eric.

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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, we generated strong Las Vegas results again in the fourth quarter. Net revenue totaled $989 million, up 4.2% year-over-year due to strength across all business verticals as we saw favorable customer demand.

Gaming revenue increased 1.4%, primarily due to the higher mix of cash customers in the hotel this year versus the prior year. Las Vegas hotel revenue increased $9 million or 3.2% year-over-year, while occupancy increased 120 basis points to 95.1% and RevPAR increased 2.1% to $141.9, despite the addition of 26,000 more room nights available compared to prior year. We experienced more demand from our FIT customer segment and double-digit year-over-year growth within our group segment. As of today, we continue to see a healthy consumer environment in Las Vegas and expect hotel demand to remain strong.

Food and beverage revenues increased $8 million or 3.1% year-over-year, primarily due to higher hotel occupancy levels and enhancements in our offerings. Caesars Palace saw the largest increase, driven by the new Vanderpump Cocktail Garden and Hell's Kitchen as well as an increase in banquet revenue due to the higher hotel group mix.

Hell's Kitchen has performed extremely well since opening, generating almost $40 million of revenue in 2019 alone.

Other revenues grew $19 million year-over-year, mostly due to an increase in entertainment revenue from higher ticket sales and prices for shows at the newly renovated colosseum at Caesars Palace and also at the Flamingo.

Las Vegas EBITDAR totaled $363 million, up 3.4% year-over-year, or up 3.9 -- sorry, 3.6% on a hold-adjusted basis. The performance was due to the increase in revenues, offset by an increase in operating expense related to the Rio's rent expense equal to $3.8 million.

Due to the short-term nature of our lease agreement to manage the Rio, rent payments will be recognized as an operating expense instead of as an interest expense for a financing obligation. As a reminder, the annual rent for the Rio is approximately $45 million or $11.25 million per quarter going forward. Excluding the Rio, Las Vegas EBITDAR totaled $352 million, up 4.5% year-over-year.

Turning to the other U.S. segment. Net revenues totaled $1 billion, up 1.8% year-over-year, driven by strength across all markets. Notably, as Tony mentioned, Indiana and Iowa generated solid performance, primarily due to our new sportsbooks that drove higher visitation, which in turn translated into higher gaming volumes. Our Southern Indiana land-based property opened in December, and we also saw an increase in gaming revenue due to the strong demand for the new asset.

Other U.S. EBITDAR increased 7.8% to $248 million, or up 7.3% on a hold-normalized basis due to increased revenues and excellent cost controls.

EBITDAR margins improved 130 basis points to 24%. The Atlantic City properties' EBITDAR improved by $4.5 million over the prior year due to higher revenues across verticals, coupled with improved operating expenses. The All Other segment includes our unallocated corporate expenses, CIE managed properties and our international operations. Our All Other segment net revenues totaled $148 million, down $4 million or 2.6% year-over-year, primarily due to decreases in volumes at our international properties. All Other EBITDAR loss increased $11 million to a loss of $25 million, primarily due to a $10 million increase at our high-end international properties and a $15 million increase in our sports betting partnership investments, all of which were partially offset by a $7 million increase in CIE performance and a $7 million reduction in labor and consulting expenses at corporate.

Looking ahead, our outlook as of today, in the Las Vegas and in the regional markets, remains positive based on demand indicators and the results we've seen to date. We believe the overall demand environment is improving with continued non-gaming growth leading the way. We continue to anticipate a strong 2020 in Las Vegas led by the Caesars Forum convention center, which is scheduled to open in March. We also expect the addition of the CON/AGG Conference in March, the NFL Draft in April, which we will be hosting in front of the Caesars Forum and the Raiders home games in the fall to provide a meaningful boost for visitation within the city. We look forward to continuing to activate our strong partnership with the NFL as they bring the Draft and the Raiders to Las Vegas.

From a liquidity perspective, we ended the year with approximately $1.8 billion of unrestricted cash. As of the end of December, our total revolver capacity was $1.2 billion. During the fourth quarter, we spent $136 million in maintenance CapEx and $76 million in development CapEx, primarily consisting of spend for Caesars Forum and the sportsbooks. Before we open the call for questions, please note that the purpose of today's call is to discuss our fourth 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. Now we'll 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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Just in terms of -- clearly, today, yesterday, coronavirus front of mind for everyone, unfortunately, from a market perspective. And I just wanted to ask kind of a several part question. For starters, are you guys seeing anything in kind of the last few weeks that has impacted or changed visitation, changed behavior as it pertains further to booking trends and what you've seen in your bookings for out periods, namely from international regions?

And then lastly, is there anything you guys are doing at present at the property level to potentially further safeguard from any issues?

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

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Yes. Thank you for the question that's obviously on top of everybody's mind. To date, we are pleased and pleasantly surprised to say that we've seen no business impact whatsoever. As a matter of fact, we're off to a great start in 2020 from our VVIP business from Asia. And I credit that to Gary Selesner and his Asian marketing team, they do a great job of cultivating that business. They take a number of trips each year, and they spent quite a bit of time there in December, and they had teed up what they thought was going to be a real strong first quarter from that segment, and that has come to fruition.

Going forward, we have a number of metrics and dashboards and items that we track on a daily basis to see if we get a precursor to any downturns. And again, I'm happy to report that we have not seen that yet. We are working on contingency plans, should the situation begin to affect business here. But again, so far, so good.

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

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And then, Tony, if I could follow-up on -- I think you'd mentioned 240,000 room nights this year associated with the convention center and $100 million of hotel room revenue on the books associated with events -- or sorry, maybe not this year, in the year post opening? How much of that...

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [5]

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Yes. It is -- sorry, I'm sorry.

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Carlo Santarelli, Deutsche Bank AG, Research Division - Research Analyst [6]

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No, I was just going to ask, how much of that is incremental relative to stuff that was maybe previously contemplated at other venues? Or is that just kind of $100 million of incremental revenue on top of what you'd be doing in some of your other venues?

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [7]

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I don't have the exact percentage, but I can tell you that the vast majority of that is incremental. We have seen a little bit of a fall off at the properties. But collectively, between what we're booking there and what we're seeing at the individual property convention spaces, we are still well above our forecast.

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Eric Hession, Caesars Entertainment Corporation - Executive VP & CFO [8]

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The only thing I'd clarify, Carlo, is that the revenue of the $100 million includes both the room revenue and the banker revenue component.

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Operator [9]

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Your next question comes from Shaun Kelly from Bank of America.

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Shaun Clisby Kelley, BofA Merrill Lynch, Research Division - MD [10]

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Maybe to build off the same kind of exposure question on thinking about maybe the high-end business. It sounds like, Tony, you mentioned the business is doing exceptionally well right now. But I think for investors sort of knowing a little bit of the exposure across the large company would be helpful. Could you give us a little bit more color, both on kind of Las Vegas, and I think this is pretty concentrated at Caesars Palace as well as in the -- more of the international piece of the business. Any ballpark metrics or anything you can give us to think about or quantify exposures for that kind of VVIP or high-end Asian play, I think, would be helpful?

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

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And I'm going to get Eric to correct me if I'm wrong, but I believe our overall profitability for the whole company, it's around 1% that comes from the VVIP business in Asia. But having said that, it's off to a great start in 2020. So I would say, through the first quarter, it's going to uptick for now.

So it's not a huge exposure. Our bigger concern going forward, depending upon which way this coronavirus goes, is we start to see cancellations of the domestic travel to Las Vegas for the fear of interacting with Asian clientele. But again, we have not seen that to date. And obviously, we haven't had any cases of the coronavirus here in Las Vegas.

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Shaun Clisby Kelley, BofA Merrill Lynch, Research Division - MD [12]

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Sure. Great. And then my other question is beyond maybe the broader operating expense landscape, I mean, at least versus our expectations, it looks like the regional properties, I think did very well on margins this quarter with margin growth. The Las Vegas piece is probably a little bit slimmer, but these numbers can bounce around quarter-to-quarter. So just maybe, Eric or Tony, your thoughts on the broader labor cost environment, which I think you called out a little bit earlier at the beginning of the year.

And also, just how much more room you have on some of the operational improvements to kind of drive margin growth. I think you've done some stuff on professional expenses and things like that?

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

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Yes. I mean, look, we've made -- I think our operating entities operate at real good margins today. And as I mentioned on the call, we improved our marketing efficiency as well as our labor efficiency. I talked about the $100 million cost that we've taken out of the business, the lion's share of that has come from the corporate structure, although the major component of that, I think there's $11 million or $12 million that we've taken out of the individual businesses by reducing our swap participation games, and we've gotten good results, particularly in the regional markets where we don't feel that it's impacted the results. So we're actually looking at a second phase of taking more of those games off the floor.

In terms of corporate, it's come from a number of areas, just through attrition, we did that voluntary severance plan where we eliminated our pursuit of the license in Japan. And I think we are doing a much better job of controlling our IT functions and looking at what efforts we really need to pursue when we scaled down the number of projects that we're actively working on. So that's allowed us to reduce our contract labor by quite a bit. So -- and we continue to evaluate through attrition or all the opportunities here at corporate. But I would say between now and merger, the lion's share of it has already been harvested.

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Operator [14]

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Your next question comes from Dan Politzer from JPMorgan.

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Daniel Brian Politzer, JP Morgan Chase & Co, Research Division - Analyst [15]

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Can you just talk broadly about the level of inbounds maybe that you're still getting on some of your gaming assets, specifically on The Strip? And maybe what the buyer pool kind of looks like there?

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

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Quite frankly, inbounds for our Strip properties is pretty much nonexistent. Where our phones are open and willing to take calls, and if we get a call, we certainly would evaluate to see if it makes sense for the business as a strategic decision.

But right now, from a Strip's standpoint, there were no active discussions and have had no inbound inquiries.

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Daniel Brian Politzer, JP Morgan Chase & Co, Research Division - Analyst [17]

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Okay. And then just pivoting to sports betting, can you talk maybe about the impact you've been seeing across properties? I know you mentioned -- you called out $6 million in additional EBITDAR, Iowa and Indiana. But I guess, to what extent is that being driven directly by sports betting versus being more of a function of increased visitation and maybe crossover play?

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

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Yes. Well, first of all, the sports betting itself outside of Las Vegas is not a -- and I don't have the number with me. I want to say it was in the $6 million range of profit or why that was generated from the sportsbooks themselves. However, we've seen significant increases in visitations that has driven incremental food and beverage revenue and incremental gaming revenue. I know, in particular, Biloxi, Mississippi, for example, we've seen a -- it sounds crazy. We've seen a 300% increase in cash beverage sales since the sportsbooks have opened.

So it's doing exactly what I think everybody had anticipated in increasing the foot traffic through the properties and having a positive impact then on all verticals, plus adding its own EBITDA into the mix as well.

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Daniel Brian Politzer, JP Morgan Chase & Co, Research Division - Analyst [19]

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Okay. And then maybe just the last one on Centaur. Is there any update on the timing for the sale leaseback? And have you start to have any conversations with VICI or maybe even any inbounds from other REITs?

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Eric Hession, Caesars Entertainment Corporation - Executive VP & CFO [20]

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No. No update on the timing there and no active discussions.

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Operator [21]

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Your next question comes from Harry Curtis from Instinet.

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Harry Croyle Curtis, Instinet, LLC, Research Division - MD and Senior Analyst of Gaming, Leisure & Lodging [22]

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Just a follow up on your comment about the inbound strength of Asian play. It's a tough question to ask, but given the fact that it's so contagious, what health precautions are you taking?

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

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Well, that's the thing I had mentioned. We're looking at contingency plans and operational plans right now, and we're actually looking to work together collectively here in the market as well as with government agencies. And I can't tell you that we have everything ironed out now right now, but we are embarking on those types of plans as we speak.

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Harry Croyle Curtis, Instinet, LLC, Research Division - MD and Senior Analyst of Gaming, Leisure & Lodging [24]

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And my follow-up question is, so it was -- is related to the $100 million of expenses that you've taken out. What is the annual increase in just your union contract costs that offset the expenses coming out? I'm interested in what a net savings is if you're seeing expenses or looked elsewhere?

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

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Well, first of all, I would tell you that the $100 million is a complete net savings because those increases would have happened regardless, number one. Number two, we budget for on an annual basis. And again, Eric correct me if I'm not exactly right, in the 2% to 3% increase for salaries across the whole portfolio, including union, and we typically come in under that. So I don't know if we have it broken out as far as how much of that is union.

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Eric Hession, Caesars Entertainment Corporation - Executive VP & CFO [26]

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Yes. We generally don't provide that information. And we look at it in more aggregate and we include things like energy pricing, which recently has been going the other way as well as wages, but a lot of it is the benefits and other extra expenses associated with just running the business from a cost perspective. And when we put our budget together, we estimate those and then try to find ways to offset them through cost savings in other areas.

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Operator [27]

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Your next question comes from David Katz from Jefferies.

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David Brian Katz, Jefferies LLC, Research Division - MD and Senior Equity Analyst of Gaming, Lodging & Leisure [28]

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I wanted to go back to a topic that you touched on earlier around sports betting. And Tony, I was listening carefully to some of the commentary around F&B increases, which are substantial, but somewhat fundamentally different from an increase in GGR. Do you have any specific statistics around growth in or improvement in GGR as a result of sports betting rolling out? And my follow-up, which I'll throw out there at the beginning is, have you been able to measure any of the total rewards loyalty members that are engaging in sports betting or any background on that yet?

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [29]

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Yes. The one thing that's been really encouraging is that a number of the people that have been engaging in sports betting in those Midwest and South jurisdictions are people that were inactive Caesars Rewards customers previously. And so we've seen a lot of reactivation of those customers, and they also are giving us other gaming work in addition to that. We've seen roughly about a 10% increase in foot traffic through the properties that have sportsbooks. I can't -- it's so hard to dissect if we see an uplift in GGR. It's so hard to say, well, how much of this is related to sports betting and how much of it is relating to other marketing initiatives or what else are improvements in weather year-over-year. And particularly, if you look at the Centaur properties in Southern Indiana, we have major capital investments there, and we've seen incredible results.

So there's a lot of noise. So it's hard to put your finger on exactly how much more GGR. But I can tell you, it's typically around 10% more foot traffic that we're seeing in these properties.

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David Brian Katz, Jefferies LLC, Research Division - MD and Senior Equity Analyst of Gaming, Lodging & Leisure [30]

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And if I may, I mean, it's certainly not in any way taking pocket share away from GGR and towards sports betting as far as you can tell.

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

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No, definitely not. No, we expect it -- it's definitely accretive incremental GGR that we're seeing from the people that -- again, we're getting a lot of customers that have been our customers in the past that are now come back to the properties, particularly in those markets where they have to come in to make the wager.

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Operator [32]

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Your next question comes from Barry Jonas from SunTrust.

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Barry Jonathan Jonas, SunTrust Robinson Humphrey, Inc., Research Division - Research Analyst [33]

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I guess, I'd start with Vegas results for the quarter. I think, overall, results were better than we had modeled, but flow-through was perhaps a little bit lighter than we'd expected. Anything you'd call out there on the flow-through side?

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [34]

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We had a number of items that came in the last quarter of the year that we don't necessarily think would repeat themselves. They put a little bit of pressure on the flow-through. I think per Shaun's question earlier, there is more volatility in the flow-throughs here in Las Vegas due to the mix of revenue as it shows up, whether it's in the casino or the hotel or the food and beverage.

And for the year, our margins were up approximately 120 basis points, and we achieved 37.5% margin here in Las Vegas. So broadly speaking, I think the flow-through is good for the whole year. And as we look into next year, we -- there may be some volatility again between quarters, but for the year, we would expect great flow through again.

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Eric Hession, Caesars Entertainment Corporation - Executive VP & CFO [35]

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Yes. And the other thing I would add is going into 2020. A lot of the cost savings initiatives, we really didn't get the full, like the voluntary severance program that I mentioned earlier, a lot of those people didn't exit the company until the end of the year. So we're not seeing the full benefit of the whole $100 million until 2020. And I think it will creep higher than that as we get closer and closer to the transaction.

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Barry Jonathan Jonas, SunTrust Robinson Humphrey, Inc., Research Division - Research Analyst [36]

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Okay. I mean, I guess, how much of that $100 million do you think was actually recognized in 2019? Just to be clear.

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [37]

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I mean we didn't really get started until the second half of the year. I don't have that number. But if I had to venture a guess, I'd probably say $25 million, $30 million, $35 million. I got a number of the people in the room shaking their head, yes, so I think that's a good estimate.

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Barry Jonathan Jonas, SunTrust Robinson Humphrey, Inc., Research Division - Research Analyst [38]

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Great. Great. And then, Tony, you talked about reductions to the participation footprint. Just curious if you're offsetting that with any slot purchases? And I guess, while you're at it, curious what the ...

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [39]

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Yes. What we've seen that's really worked for us is when we replace the participation games with newly acquired product and new product and the results that we're getting at the new product is almost is doing as well as the participation games. There's been a couple of locations and a couple of isolated situation where it's a little bit more competitive, where we think that it hurt us, and we're adding back, but the net number is going to continue to go up because we've seen much more positive results due to that than negative.

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Barry Jonathan Jonas, SunTrust Robinson Humphrey, Inc., Research Division - Research Analyst [40]

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Great. Great. And then just last one. I guess it's clear Vegas is a strong setup for 2020. But curious on your thoughts beyond that several new properties and entertainment venues are going to be coming online after that. Just curious how you think about more of the medium to longer-term setup?

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Anthony P. Rodio, Caesars Entertainment Corporation - CEO & Director [41]

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Well, look, I would argue or could argue that the more catalyst for additional traffic is only going to help everybody. A rising tide lifts all boats. I mean the MSG event center is going to, I think -- I mean help even more -- I mean even though resorts were -- I'm not exactly sure when it's coming online, but that's going to create more interest and traffic into the city, and you've got the expansion of the Las Vegas Convention Center. So I view them all as positive.

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Operator [42]

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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, and you may now disconnect. Have a great day.