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Ball Q4 2021 Earnings Call Transcript


View Latest SEC 10-K Filing

Participants

Corporate Executives

  • Bobby Lavan
    Senior Vice President, Finance & Investor Relations
  • Lee Fenton
    Chief Executive Officer
  • Steve Capp
    Chief Financial Officer
  • George Papanier
    President Retail

Presentation

Operator

Good day and thank you for standing by. Welcome to the Bally's Corporation Fourth Quarter 2021 Year-End Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer period. [Operator Instructions]

I'd now like to turn the call over to Bobby Lavan, Senior Vice President Finance and Investor Relations at Ball's. Please go ahead, sir.

Bobby Lavan
Senior Vice President, Finance & Investor Relations at Ball

Good morning, everyone and thank you for joining us on today's call. The earnings release and presentation that accompany this call are available in the Investor Relations section of our website. With me on today's call are Lee Fenton, Chief Executive Officer; George Papanier, President Retail; Robeson Reeves, President Interactive; and Steve Capp, Chief Financial 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 includes plans, expectations, estimates and projections that involve significant risks and uncertainties. These risks are discussed in the company's earnings release and SEC filings. Actual results may differ materially from the results discussed in these forward-looking statements.

In addition, during today's call, management will refer to certain non-GAAP financial measures. Reconciliations to the most comparable GAAP financial measures are included in the schedules contained in our earnings release and presentation. We do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project special charges within certain expenses. Today's call is also being broadcast live on our Investor Relations site and will be available for replay shortly after the completion of this call.

Now, let me hand it over to Lee.

Lee Fenton
Chief Executive Officer at Ball

Thank you, Bobby, and hello, everyone. With our first full quarter together as we launched Bally's, I am extremely excited about the potential across our business for 2022 and beyond. We closed Gamesys, the largest of our acquisitions to date on October 1 of last year and we've made significant progress on integration to this point and we'll give you just a few highlights.

With the [indecipherable] consolidated group budget based on a clear set of strategic goals for 2022. In the next week, we will unveil our purpose and values to our global employee base, which will be at the heart of how we grow our business over the coming years. We have started to see the first fruits of our omnichannel vision with the launch of Bally iCasino [Phonetic] in New Jersey. Our data project, which will be a key enabler to allow us to further optimize our business performance is well underway.

We are on-track with our rollout of Bally VAT to.0 [Phonetic]. We continue to build top-of-funnel awareness, grow our customer data set and see increasing engagement on our free-to-play products. We have rationalized the Gamesys public co-stand [Phonetic] to the tune of approximately $5 million. We launched the Bally's Foundation in the UK to improve global employee buy-in and global awareness and we will launch the same in the U.S. in the next few months. And as we continue to drill down into the business, we are finding best practices among teams, which will drive efficiencies for us in the longer term.

Bringing together a wide array [Phonetic] of assets, we geographically dispersed teams and a number of business lines is not without complexity. So, I'd like to give my heartfelt thanks to all of the Bally's team for the passion with which they have approached all of the integration work streams.

As we've stated before, we are unique combination with equal revenues coming from U.S. retail casinos and the global digital business. We believe in customer centricity driven by great service, great data and great analytics. We do not need to be first to market with an inferior product, customers will always have choices and your first impression is more important than timing of launch. We will launch when the product is right and we are willing to miss short-term gains to build long-term trust and value with our customers.

With the continue to rational spending on sports betting, we have concentrated our North American interactive focus on building sports betting product that is U.S.-centric and easy to use for the mass market. We will be getting to market at 2.0 product in Arizona and New York in the first half of 2021. We've also accelerated our efforts to go live in Ontario with regulated iGaming and we expect to launch there in the summer and we'll add additional state launches through the second half of the year.

Bally iCasino launched in New Jersey in December and I'm very pleased with the early results. As you know, one of the core plans for the rationale and bringing together the Bally's and Gamesys was to enable a lower cost of acquisition into digital products. We've seen very positive early momentum through our cross-sale campaign from the AC database into iCasino. It's above our expectations across the board, but actually delivering double-digit database conversion in the higher value segment.

Across sale campaign has enabled our blended CPA to come in under $200 and this brought in customers with predicted LTVs, Circa 2 x compared to what we've seen on our Virgin iCasino brand in the same state. We plan for increase our cross-sell campaigns further in Q1 2022. Naturally, we will also evolve this proposition as we go forward and that was illustrated with the addition of Live Casino to the product on Monday of this week.

We continue to focus on a differentiated omnichannel strategy where we drive awareness of the Bally's brand using free-to-pay products to optimize customer acquisition, providing cost structural advantages for our interactive business. A great example of this is the $100 Million March Madness bracket challenge that we will launch on March 7, leveraging our properties, our extensive partnership with Sinclair and our free-to-play expertise to deliver an extremely cost effective marketing campaign.

As we introduced the third quarter, we're going to report our business with three primary segments: casinos and resorts, International Interactive, and North America Interactive. So, turning to casinos and resorts; we have a large portfolio of regional gaming assets that generate significant and sustainable cash flow. 2021 was a record-revenue, EBITDA and free cash flow year. The 2021 pro forma for acquisitions completed in the year, excluding Atlantic City, revenues were $983 million and EBITDA was $395 million showing at 40% EBITDA margin.

Fourth quarter gave us EBITDA of $83 million on revenues of $278 million. Excluding AC, EBITDA of $88 million on revenues of $247 million, showing a 36% EBITDA margin. In the seasonally lower fourth quarter, we were negatively impacted by COVID and the previously mentioned smoking ban in triple [Phonetic]. In addition, in response to market conditions, we bought back from [indecipherable] in November-December, the course a little upside with COVID and the impact of poor weather. We pulled back those maintenances in January. In the past few weeks, we have seen the return of strong margins.

2021 pro forma as if all acquisitions closed at the beginning of the year, we would have had revenue of approximately $1.15 billion. Going to turn to $2 billion, we expect revenues to be flat or slightly up from that level. EBITDA in the range of $385 million to $395 million. We expect the Atlantic City will contribute $150 million of revenues and no EBITDA.

Excluding AC, we expect EBITDA margins to be in the 38% to 39% range. This includes the January that have $5 million of headwinds in this due to COVID and particularly poor weather. Volumes have bounced back in-line with expectations in February, inflationary pressures, particularly on the wage side the main headwinds into 2022. But we expect the market to be rational and continue to expect that we will maintain most of the margin guidance over 2019. Our FTE count of the casinos at the end of Q4 2021 was down to 26% over Q4 2019 and we expect it to hold at that level through 2022.

We have $180 million of capital expenditures in the properties in 2022 with the key highlights being Atlantic City, where we'll add 750 new hotel rooms in several new amenities that will be in service by Memorial Day, Lincoln where will build out 50,000 square feet and have a significantly enhanced Asian offering. In Kansas City, the investment will extend into 2023, but provide significant upside to an already successful story with the addition of 40,000 square feet of land-based facility housing non-gaming amenities. In addition, we will finalize the full Bally's rebranding of our properties by the second quarter.

Moving to International Interactive, which primarily operations in the UK and Asia -- 2021, the record revenue, EBITDA and free cash flow. In terms of revenue for the full year on a constant currency basis, UK was plus 10% year-on-year and Asia was plus 18%. Tough comps in Q4 on a constant currency basis, the UK was down 5% and Asia, up 8%. Handle in the UK was only up 1% or more than 40% move down in house [Phonetic] led a result slightly below expectations.

For January, as such came back to normal levels, Q4 averaged monthly active users were down 3% year-on-year, our deposits picked up 4%. We continue to believe that the average bet size customer profile responsible gaming standards and the lack of dependence on VIP business puts us in a favorable position of the UK progresses of the Gambling Act Review. We have always been and will continue to be the leader of best practices in the market, illustrated by our recent GamCare accreditation for the safer gambling standards at Level 3, which is the highest level any company can achieve.

In Asia, within fourth quarter revenues, plus 8%, while total handle was plus 14% and deposits were up by 15%. Our new [indecipherable] brand continues to take share and during Q4, we moved to 24/7 customer care for the market.

Slots is now a launched product segment and even when you combine Live and RNG Casino. And we believe this demonstrates wider adoption of online gaming in the market. We were first mover out there and can say that the data is pointing us to tremendous opportunities in both sure and long-term. In 2021, 34% of NGR [Phonetic] was from customers acquired over two years ago and this is up from 22% in 2019 and 2020. Having a strong and growing long-term customer base allows us to be more competitive and continue to invest while maintaining strong growth and cash flow.

In the UK for 2022, we expect low-to-mid single digit growth. For H1, we have some tough COVID comps where we expect the year-on-year decline you saw in Q4 to be the low point. We expect Asia to deliver double-digit growth. Spain, rest of Europe and rest of the world, will have revenues of $50 million to $60 million compared to $68 million in 2021 due to the closure of non-core market. We expect a total revenue of approximately $1.15 billion and assuming a GBP U.S. fee rate of 1.35. Segment EBITDA margin should stay of our long-term guidance of 28% to 29%. We will spend approximately $30 million on capital expenditures, consistent with the historic spend on platform development.

Lastly, North America Interactive, which comprises our growing B2C operations and supported B2B operations. The business continues to grow quarter-on-quarter $19 million revenue in the quarter, compared to $11 million in Q3; EBITDA losses of $8 million in the quarter, which is within the range that we expected and compares to approximately $5 million of losses in the third quarter. Bally iCasino launched in December and we have good momentum through January and into February. Brand awareness is strong and improving through the visibility given across Bally Sports.

The North America Interactive, we project 2022 to have a $125 million of revenue and a negative $60 million of EBITDA and $30 million of capital expenditures. The capital expenditures are primarily software development costs required for our state-by-state launches.

Our corporate segment is projected to be $50 million and our REN which does not include any REN associated with Tropicana Las Vegas is $46 million. We will announce additional details on Tropicana in the coming months, but we continue to be excited about the opportunity in Vegas and we are in our advanced discussions with potential development partners. We expect to be in a position to communicate our partners and plans by the half year ahead of completion in early Q3.

Putting all of this together, it gives us a headline net revenue of $2.4 billion to $2.5 billion and adjusted EBITDA of $560 million to $580 million and that includes $60 million of EBITDA losses in North America Interactive. Capital expenditures include the $120 million of growth capital at the properties, $60 million of maintenance, plus $60 million interactive, split between North America and International, and $30 million of one-time CapEx related to integration.

Prior to turning to Steve, I want to update you on our ESG efforts. Gamesys was a leader in ESG in the UK and Bally's will be a leader in the U.S. Bally's have now established an official ESG committee of the Board, the longstanding Gamesys foundation in the UK has been renamed the Bally's Foundation and we'll spend more than GBP2.5 million this year on efforts in the UK. We are also setting up a foundation in the U.S. to invest in the communities that we serve. From an ESG reporting perspective, SASB reporting will go live in Q1 in 2022 and the UN Social Development Goals Reporting framework will be set in the second quarter. In the coming months, we will have a dedicated ESG section on our website, but most importantly, we're increasing our responsible gaming awareness programs across our entire company. Giving back to the community, maintaining a healthy relationship with our customers has always been a priority of our culture.

Now, let me hand over to Steve.

Steve Capp
Chief Financial Officer at Ball

Lee, thank you. Mostly housekeeping for me for the quarter. We reported net revenues of $548 million. This reflects a full quarter of interest [Phonetic] revenues, of course, under our new segment reporting structure. Additionally, we filed an 8-K this morning that has a recast for the past seven quarters. That should help satisfy your modeling requirements.

For the quarter, adjusted EBITDA was $119.1 million. This includes a $5.7 million loss at Bally's AC that we will continue to call out as we work through the seasonal loss profile at that property. Also in the quarter, we repurchased $87 million worth of common shares at an average price of just under $40. Total share count, which assumes full conversion of Sinclair warrants and options and other contingent shares is $66.5 million and the schedule for this is included in our 10-K materials. Total debt outstanding at the end of the quarter was $3.53 billion and cash on balance sheet was just over $200 million.

A few modeling assumptions. Depreciation and amortization for 2022 will be approximately $400 million, which includes $265 million of purchase price amortization from the Gamesys transaction. Cash taxes will be approximately $30 million primarily international and state taxes. We estimate our GAAP effective tax rate to be 20% for 2022. Stock compensation will be approximately $30 million.

As Lee discussed, we will have $180 million of property-related CapEx with values AC front-end loaded. The $60 million of Interactive CapEx is spread evenly throughout the year. The $30 million of corporate CapEx will be front-end loaded as well.

And so with that Operator, we are prepared to take questions.

Questions and Answers

Operator

[Operator Instructions] We will take our first question from Lance Vitanza with Cowen. Please, go ahead, your line is open.

Lance Vitanza
Analyst at Cowen

Thanks, guys. Thanks for taking the questions. I have three if I can. The first is the status of new UK gaming regulations. Maybe we'll just start there, if you could comment on that, please.

Lee Fenton
Chief Executive Officer at Ball

Thank you, Lance. Well, unfortunately, due to the pressures really on government time, the schedule for the white paper looks to have shifted out a little again. Not pleased about that, but we are where we are. As I mentioned in the remarks, we've got a very mass market base and relatively low spend per customer compared to others in the market. So we think we're well-positioned for potential changes that might come through the review. It's worth remembering that whenever we faced any prior regulatory change in the UK over the past 20 years. Even when it have a short-term impact on us over the mid term, one to two years, we've always been net gainers. So, I continue to believe that the further change to the regulatory landscape in the UK through the review and of course we don't know exactly what it will be, it will most likely to consolidate share in the larger players and see smaller players exit the market. Indeed, we actually saw someone exit the market earlier this week and hand back their license in the UK. So, we feel disappointed that the timeline keep shifting out, but we're expecting to see a white paper in May and typically then, that would be kind of 90 days consultation around that white paper and then it would depend whether it needs an act of parliament to enact anything in that white paper as to when it could have an impact on the market. It doesn't need an act. It could be in by Q4 or Q1 of 2023. If it needs an act, it's probably mid to second half of 2023.

Lance Vitanza
Analyst at Cowen

Okay, thank you for that. I guess, the next question would have to do with the New York and how you are thinking about your marketing in approaching that market.

Lee Fenton
Chief Executive Officer at Ball

So, we want to think about our marketing in New York, much different layout and then obviously with an eye on the margin because of the tax rate there than we will elsewhere. Mentioned database cross-sell. Even though we haven't got a property in New York today, we do actually have a fare [Phonetic] as database of New York players and that's because actually AC database is as large with players based with New York addresses than it is with players with New Jersey addresses. So, we also have a large chunk of Pennsylvania players in that database as well. So that's going to be our first point of call. We'll be going there and we'll be looking to leverage our digital expertise in terms of marketing, but we'll be approaching it cautiously and I don't think you'll see the same kind of tactics from Bally's that you'd see with other players with very, very significant spend above the line.

Lance Vitanza
Analyst at Cowen

Okay. And lastly for me before I jump back in the queue is, could you just talk about how the integration of the technology is going? Obviously the Gamesys technology is key, but also some of the deals that were put together before you arrive that works, et cetera, how is all of that being integrated and how would you describe where we are in the process of getting everything to really gel? Thanks.

Lee Fenton
Chief Executive Officer at Ball

Thank you. There has been some Herculean efforts, I would describe, the new technology teams said over the last four months. I think that they've done an amazing job and starting to do all of that plumbing [Phonetic]. It's not an easy task when you're bringing technologies together. We've already got working now the PAM from Gamesys, all of the data flowing and the data architecture rollout and the sports engine from Bet.Works now -- actually now rebranded to Evolve as part of our single platform. All of that plumbing is happening and we now can take bets end-to-end. So whereas four weeks ago, we didn't have absolute surety on that. That is all now up and working. So, I think the teams have done an amazing job in terms of pulling that together. Our IT is another area where we want to progress and we'll be very focused on making sure that all of the interactive assets -- it wasn't just Bet.Work that you mentioned, but all of the other interactive businesses that were acquired pre-Gamesys, all get onto the same common working platforms as well, which is incredibly important for us enjoying in [indecipherable] and just communicating more effectively. But I guess the short answer is very pleased with how the technology, the sides come together. It's been a ton of work from everybody and that has emboldened us to say that it will -- we talked about launching in H1. We know we're definitely launching in H1 and we know we're definitely launching in Arizona or in New York in H1.

Lance Vitanza
Analyst at Cowen

Thanks very much for your help.

Lee Fenton
Chief Executive Officer at Ball

Thank you.

Steve Capp
Chief Financial Officer at Ball

Thanks, Lance.

Operator

And we'll take our next question from Ricardo Chinchilla with Deutsche Bank. Please, go ahead, your line is open.

Ricardo Chinchilla
Analyst at Deutsche Bank Aktiengesellschaft

Hey guys. Thanks for taking the questions. First to begin, I was wondering if you guys could comment on what maximum leverage level do you guys feel that you these set of assets can withstand on -- I don't have consolidated basis, I don't have restricted group basis. So, any comment on that maximum leverage that you will feel comfortable having at these with this portfolio and do that allow everybody to sleep comfortably at night would be very helpful.

Lee Fenton
Chief Executive Officer at Ball

I think it is Ricardo. Hi, Ricardo, Thanks for the question. We're comfortable with where we are of course. The main way that we'd like to bring leverage down is to drive our profits and drive our profit lines that we're definitely comfortable with where we are there. I don't know, Steve, have you got any further comment on that?

Steve Capp
Chief Financial Officer at Ball

Ricardo, hi. Yes, just a little bit. As we mentioned when we marketed -- frankly, the equity and the bonds last year, this is a healthy place for this growing company to be where we are now, kind of low-fives if you will, cash flow leverage. We do intend to delever over time. The CapEx profile that Lee mentioned in his dialog is less than half of our of our consolidated EBITDA and obviously, we have the ability to manage that along the way as appropriate vis-a-vis leverage. It's never a static situation, it's quite fluid over time, but we are mindful of leverage and we intend to work it down over time. By the way, it's a two-part equation. Debt and the cash flow side as North American Interactive ramps into 202,3 that lever will be impacted favorably as well as our recovery we think from Omicron setbacks in 2021. That's all I have, Lee.

Ricardo Chinchilla
Analyst at Deutsche Bank Aktiengesellschaft

Perfect. If I could squeeze one in on the interactive front. It seems like your expectation for the burn is going down from $80 million to $60 million. Is it related to timing on launches getting into 2023 or is it more related to you guys being more cost-conscious in some of your assumptions, particularly now that that some of your peers might be a recurring to lower media spend?

Lee Fenton
Chief Executive Officer at Ball

I'd say a little bit of both. Yes, it's partly timing and partly yes just being cautious in terms of where we wanted to go on the build-out and partly indicated a little bit by the positive cross-sell news that we've had from Bally iCasino in New Jersey. That's kind of the good news. It's early days there, but we're comfortable with the guide to $60 million.

Ricardo Chinchilla
Analyst at Deutsche Bank Aktiengesellschaft

That's all I had. Thank you so much.

Lee Fenton
Chief Executive Officer at Ball

Thanks, Ricardo.

Operator

We'll take our next question from Dan Politzer with Wells Fargo. Please, go ahead.

Dan Politzer
Analyst at Wells Fargo & Company

Hey, good morning, guys and thanks for my questions. So I guess first on some of your real estate that you own at your casinos, can you just walk us through. Are there any property-specific nuances that would limit flexibility for sale leasebacks? And I ask that thinking about Rhode Island where I know you just renegotiated something this past summer, that gave you more flexibility. So are there any other properties that are encumbered and maybe I guess can you talk about is there anything special about Rhode Island that would limit flexibility?

Lee Fenton
Chief Executive Officer at Ball

George, can you pick that one up?

George Papanier
President Retail at Ball

Sure, thanks. Hey, Dan. Our Tahoe property is currently under a lease arrangement. Other than that, we have the ability to monetize and use the other assets and obviously that will be depending on our strategic plan going forward. And Rhode Island, there is really nothing especially as part of the previous legislation that was passed for IGT that prohibits us from monetizing any of those properties through a sale leaseback got it.

Dan Politzer
Analyst at Wells Fargo & Company

Got it. And then just switching to North America Interactive. Your Chairman recently spoke about some challenges that are kind of well-known out in the market. How do you view the opportunity to gain share? Is this something you're going to chip away at over time or are you going to make a big splash with the large media campaign? And does this strategy kind of coincide with the reduction from the $80 million burn to $60 million?

George Papanier
President Retail at Ball

No, there was never a big brash media campaign the way we were going to plow tens and tens of millions into that is something where we will chip away over time and we will leverage the assets that we have. We think we have some phenomenal assets and strategically made the right choices in terms of trying to create a differentiated customer funnel. We have a long-term deal with Sinclair which one, gives us the legitimacy in sports; and two, I think makes the Bally brand very evident and we think we can leverage that a lot further. And we've got significant free-to-play capability which we believe helps [indecipherable] funnel. So, I don't know if I like the phrase 'chip away over time', but gain steadily, incrementally and sustainably over time is probably where I would place us rather than the big all out media campaigns.

Dan Politzer
Analyst at Wells Fargo & Company

All right. That's fair and if I could squeeze in one more quickly. The special committee, is there any expectation for when investors can expect an update on how things are kind of progressing there?

George Papanier
President Retail at Ball

Dan, I can't say any more than what's already been released. We formed a special committee of the Board, they will be considering the proposals. I think it was announced the other day they have appointed advisors now. So those advisors need to do their work and consult back with the special committee. But there is no set timing I know, no overall can give you now [Phonetic].

Dan Politzer
Analyst at Wells Fargo & Company

Understood. Thanks so much.

George Papanier
President Retail at Ball

Thank you.

Operator

We'll take our next question from Jeff Stantial with Stifel. Please, go ahead, your line is open.

Jeff Stantial
Analyst at Stifel Nicolaus

Great, thanks for taking our questions. It's great to hear from you all again. Apologies if I missed this, but I wanted to talk through the North America losses on the online front a bit more. As it stands with your current rollout plan, do you have a sense yet when you might see the peak from a quarterly EBITDA loss perspective? And how are you thinking about the timing to inflect EBITDA positive, all things considered?

Lee Fenton
Chief Executive Officer at Ball

In terms of guidance, we've said probably $60 million in 2022. We would expect that to probably repeat in 2023 as we rollout into further states. And in terms of getting to profitability. Obviously, we're early into this, so that has some challenges and to change along the way. But we would expect to get to profitability at some point in 2024.

Jeff Stantial
Analyst at Stifel Nicolaus

Oh, okay, great. That's very helpful. Thank you. And then for my follow-up, I wanted to touch on the prospects, kind of following along with one Dan's questions on more real estate monetization here. We've seen some favorable cap rate comps out there more recently and there's comments from your Chairman suggesting, there's potentially some value not being realized in your portfolio on the real estate front by the public markets. All things considered, has this changed your view on potentially monetizing some of your wholly-owned assets, or do you still view this mostly as a financing mechanism to fund more inorganic growth on the brick and mortar front?

Lee Fenton
Chief Executive Officer at Ball

Listen, you've seen us do some sale leaseback over time. We've tended to do it when we got a strategic reason to do it and I think that remains to be our outlook. So that is the big asset that we hold within the portfolio. We've got some properties that are running incumbent [Phonetic]. So we'll predominantly look at it when we've got something strategic that we think we can leverage off the back of it.

Jeff Stantial
Analyst at Stifel Nicolaus

Perfect. That's all from me. Very helpful, thanks.

Lee Fenton
Chief Executive Officer at Ball

Thanks, Jeff.

Operator

[Operator Instructions] And we will take our next question from David Katz with Jefferies. Please, go ahead.

Cassandra Lee
Analyst at Jefferies Financial Group

Hi, this is Cassandra asking for the team. Thanks for taking my question. I just wanted to get on the before Downtown Chicago license. When can we expect a decision from the city?

Lee Fenton
Chief Executive Officer at Ball

The date in terms of decision from the city has pushed out a little bit. So we're now expecting a decision in April, where previously that was expected in March. We continue our dialog, we continue to be excited about the opportunities on the right term, but we're expecting a final decision come April.

Cassandra Lee
Analyst at Jefferies Financial Group

Got it. And for a [indecipherable], I think that will also be rebranded once the acquisition close. Can you talk about maybe potential capital requirement there and an update on the strategic plan for that property?

Lee Fenton
Chief Executive Officer at Ball

So we're not going to do that today, Cassandra, because as I mentioned in my remarks, we're in a number of discussions with development partners. Very excited about the potential opportunities, but we're not actually in a position today to say what those plans are. We said we will confirm those plans. Before the end of the half year ahead of completion on that property in early Q3.

Cassandra Lee
Analyst at Jefferies Financial Group

Got it. Thank you very much.

Lee Fenton
Chief Executive Officer at Ball

Thank you.

Operator

We'll take our next question from Barry Jonas with Truist Securities. Please, go ahead.

Barry Jonas
Analyst at Truist Securities

Hey guys, good morning. I wanted to start share repurchases. There was a nice level in the quarter. How are you thinking about that going forward?

Lee Fenton
Chief Executive Officer at Ball

Thanks, Barry. So we obviously purchased a fair amount in the run-up to the end of the year. We're continuing to keep that in mind and we continue to look at that on a basis alongside other opportunities for our cash investments. But right now, we're not active in the market and we'll see how we go from here.

Barry Jonas
Analyst at Truist Securities

Great. Then shifting to Gamesys. You talked about customer acquisition reset in December, which we believe is the Google auction. Just how should we think about that going forward?

Lee Fenton
Chief Executive Officer at Ball

We have had somewhat of the bounce back. So our trend line in the UK has been somewhat consistent with our peers as we pass through some very tough comps. We were further impacted by that house-edge [Phonetic] that I mentioned, which was actually the second-lowest quarter ever on record for us and then we saw the cost of acquisition inflation in the Google auction in the second half of 2021 and we decided, we wanted to be disciplined in that spend and not chase. And you saw a bit of that impact from revenue in Q4. We're very happy with current trends in the UK and we're back at where we would expect to be in terms of levels of acquisition. So, I don't think -- you can't say it's not going to happen again, but it's not happening currently and so we're back on track in terms of where we would expect to be in terms of levels of STDs and the spend to achieve them.

Barry Jonas
Analyst at Truist Securities

Great. And then if I could sneak one in. I recently had the opportunity to see Twin River Lincoln and I was just hoping to get more color on the construction there. Maybe your thoughts on ROI and really the player base you're targeting. Are you looking to kind of reclaim some lost business or do you expect you're going to significantly grow the market? Thanks.

Lee Fenton
Chief Executive Officer at Ball

Thanks, Barry. So clearly, a big Asian focus there but maybe George is super-close to that. Maybe he want to add some color.

George Papanier
President Retail at Ball

Sure. So we broke ground on this project in September, which will again expand the gaming floor by 40,000 square feet. It will also allow us to create -- Lee referred to -- what we're building is a destination Asian-targeted gaming and amenities, which will include an Asian food hall, a feature bar, signature ward [Phonetic] feature. We had a topping off ceremony at the beginning of February. Additionally, we're going to be adding 14,000 square feet of Korean spa and that will be constructed within our hotel where we already have 4,000 square feet that is vacant and we expect everything to be online for Thanksgiving in 2022. It's a bit of a defensive strategy, but clearly it's to reintroduce customers that we feel helps with trips, with primarily encore that we'd like to recapture back into providing more visitations to us.

Barry Jonas
Analyst at Truist Securities

Perfect. Thanks so much, guys.

George Papanier
President Retail at Ball

Thanks, Barry.

Operator

There are no further questions at this time. I will turn the call back over to Lee for any closing remarks.

Lee Fenton
Chief Executive Officer at Ball

I just like to thank you for your time this morning and thank you for your continued attention on the business and I think we've got a tremendous opportunity with the assets that we pulled together over the last 24 months of Bally's and we're only really just getting going in terms of realizing what they can do once combined. So, thank you for your time and I wish you a great rest of the day.

Operator

[Operator Closing Remarks]

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