Thomas R. Reeg
Chief Executive Officer at Caesars Entertainment
Thanks, Bret. Thanks, everybody, for joining us today. Very happy with the quarter, strong quarter again for us starting in Las Vegas. Keep in mind, we were up against the strongest quarter that we've ever had in Las Vegas. We were missing a large group that comes once every three years to Caesars Properties. That was in last year's numbers, not in this year's numbers. We telegraphed that last quarter. So that was known.
What you saw last week in the Nevada numbers was June hold in baccarat was not as strong as it was in the prior year. We participated in that. I don't particularly like to talk about hold, but it's notable enough that I should in this quarter. We're in the gambling business. What we're looking for is the volumes to come through the property, and they came through. We just didn't hold in June like we did in the past June. Both the miss in that -- of the group from last year and the hold impact in June are dilutive to margins. Obviously, the group business for us is accretive to our overall Vegas margin. And then clearly, revenue that would flow with normal hold is accretive as well. So as you're looking at margins on a year-over-year basis, keep that in consideration.
As we look at forward, forward in Vegas continues to look very strong. We had a strong July. We feel very good about the remainder of third quarter. And then fourth quarter, you've got Formula 1. First quarter of '24, you've got Super Bowl. I've said in the past, I think Formula 1 is a 5% lift, not including whatever happens at the tables really just from increased hotel revenue, that -- hotel and food and beverage revenue, that still seems to be the right zip code for us. Demand for F1, particularly at the high end, has been very, very strong for us. We feel very good as to how we are positioned ahead of the event, and we're anxious like everybody else to see how this event plays in Las Vegas as we look to future years.
Super Bowl '24 is exceedingly strong from a demand standpoint, where we sit today in terms of booked capacity versus a typical Super Bowl. We are dramatically ahead of and at higher rates than -- typically, at this time, ahead of the Super Bowl. And if you just anecdotally look at who's going to be getting our tickets, the average customer that will come to the game with us is substantially more valuable than prior Super Bowls. So Vegas remains very, very strong for us. Feels very good. Really, no discernible impact in terms of any recessionary concerns, any concerns about the consumer as we look out.
The only thing to call out, Anthony talked about, the Jubilee Tower at Bally being converted to Versailles at Paris. We'd expect those rooms to be back online before the end of the year. We don't expect the entire project to be done until first half of next year, but there will be some disruption in that tower at Horseshoe now that we're underway.
If you look at the Regional portfolio and really the whole quarter is a testament to diversification. We had what I'm talking about in terms of the group miss -- the missing group in Vegas and the hold impact in June. In the Regional business, we've got a number of properties that are under competitive pressure due to competitive openings. I'd call out Tunica is facing a property that opened about an hour closer to Memphis that has pressured Tunica. We've got Council Bluffs has been a bit pressured by casino capacity being added in Nebraska. And then we have Chicago properties both in Illinois and Indiana that are impacted by the expanded casino offerings in Illinois that have come online and continue to come online.
On the other side of that, what we've got is the fruits of our capital investment cycle that we're -- as Bret said, we're reaching -- we're cresting and reaching the end of. You've got new property in Danville. You've got projects in both Indianapolis tracks. You've got Lake Charles now open. You've got the Atlantic City spend. And as a result, our regional EBITDA, despite a super strong comp, we're just about flat year over year, which I think is going to compare well with others that you'll see over the next couple of weeks. Again, as you look to third quarter off to a strong start, we're comping against an extremely strong third quarter of last year in Regional. And it looks like we'll be able to beat that this year through July. That's particularly encouraging for us,
Flipping to Digital. Digital was a loss last year. We've talked a lot about inflecting to positive and driving real EBITDA through that vertical, and it's spectacular to see our first full quarter of positive EBITDA, as Eric detailed. I laid out pretty specific targets in terms of where we can be in Digital, looking out to '25 on our last call and then I went to some conferences where a lot of you told me there's no way we'll get there. I would tell you every number that I laid out 90 days ago or so. I'm 100% confident that we're going to hit them. Every metric that I look at going forward is at or above where we were 90 days ago when I laid out those targets. So I tell you, I'm reiterating those targets as we look forward.
Big -- on the tech side, those are big moves for us. It's very -- you put them in a list, and I don't really know that the impact is emphasized enough. When we took over William Hill, William Hill had one employee working on iGaming. We were on old technology that was limited in a whole number of ways. We soft launched Caesars Palace Casino about two weeks ago. We're waiting on approval in a couple of jurisdictions that I'd expect any day now. And then you'll see a full launch of the product, but I'd encourage you to go take a look. It's a casino first entry into our Digital business. And in terms of capabilities, bonusing segmentation, proprietary games, live dealer, it is light years beyond what we've been operating under that. As Eric said, grew iGaming revenue 27% in the quarter.
We are fully aware that we have significant competition in the iCasino space. We don't expect that we're just going to come in and run everybody over, but we feel like we've got the product to start to build market share and wrapping that into Caesars Rewards has been and will continue to be powerful for that business. So you look at the quarter. Second quarter of last year was the best second quarter that we ever had -- the second best quarter that we had ever had, and we topped it in EBITDA this year. So the turn in Digital and Regional holding its own offset the loss of that group in Vegas. So this is exactly how we built this business, and it's great to see it come together.
One more point on Digital. Moving to Liberty in Nevada is an enormous lift. We were operating on the equivalent of a Commodore 64 computer in the old technology. And now, we have the state-of-the-art liberty app that we operate in all of our jurisdictions. This is a dramatic leap for us in Nevada. If you think about the Super Bowl happening and all of the visitors that will come to the state and our market position in the state, and now we have the app to -- that's competitive with what they've got at home, whether it's with us or somebody else, that's going to be a giant customer acquisition opportunity for us. So we're particularly excited about that.
I would expect that 95% of our handle in Nevada will be on Liberty by the middle of this month and, virtually, all of it by kickoff of football season. So we feel really -- this is our third NFL kickoff since we launched our Digital business. In terms of how I feel heading into the season, I think we are very, very well positioned as we head in.
So Bret talked about we continue to pay down debt. Conventional leverage now is around four times and going lower, would expect that to go lower. Given where we are in the capital cycle, where we are with the performance of the business, we're starting to look at what do you do with the free cash flow that will be generated in '24 and '25 and is there a return of capital piece or is there an external opportunity that could be interesting to us. I tell you as sitting here today, three years after the Caesars transaction closed, we're 30, 60 days beyond the first time where I'm feeling where we can be offensive from an external opportunity standpoint. So it has been a long road to get through everything that happened with COVID, the merger. We really feel like we're on strong footing as we head forward. And the cash flow machine here is going to continue to accelerate as results continue to improve, Digital continues to deliver, improving cash flow, interest expense goes down. We really feel strongly about where we sit today.
And with that, I'll open it up for questions from the audience.
