MGM Resorts International (MGM) — Q1 2024 Earnings Call Transcript

Good afternoon, and welcome to the MGM Resorts International First Quarter 2024 Earnings Call. This call is being broadcast live on the Internet at investors.mgmresorts.com, and we've also furnished our press release on Form 8-K to the SEC. On this call, we will make forward-looking statements under the safe harbor provisions of the Federal Securities Laws. Actual results may differ materially from those contemplated in these statements. Additional information concerning factors that could cause actual results to differ from these forward-looking statements is contained in today's press release and in our periodic filings with the SEC. Except as required by law, we undertake no obligation to update these segments as a result of new information or otherwise. During the call, we will also discuss non-GAAP financial measures when talking about our performance. You can find the reconciliation to GAAP financial measures in our press release and investor presentation, which are available on our website. Finally, this presentation is being recorded. I will now turn it over to Jonathan Halkyard.

Thanks, Andrew, and good afternoon, and thank you, everyone, for joining our call. We've decided to change our approach to these calls in the new year to give you a more focused recap of our results with additional color and commentary around our plans for the future. With that in mind, I'll start the call with a discussion of the quarter and our growth algorithm and then pass it over to Bill for his comments. As you saw from our press release, we delivered another record quarter across our company's consolidated businesses, generating record net revenues of $4.4 billion, up 13% from last year, net income of $217 million and adjusted EBITDAR of over $1.2 billion. During the quarter, cash provided by operating activities was $549 million and free cash flow was $377 million. This includes MGM China's $215 million in cash flow from operating activities and $15 million in capital expenditures. In Las Vegas, we achieved 4% net revenue growth supported by strong ADRs, which were up 7% year-over-year. Our luxury resort offerings on the Strip served as a distinct competitive advantage, driving top line growth up 5% during the quarter. Looking ahead to the rest of the year, rate is pacing ahead of prior year for each of the remaining three quarters and group rooms on the books are up year-over-year. In the regions, it's no surprise that our businesses were broadly impacted by poor winter weather in January. That said, we experienced a quick recovery in February and acceleration into March. This also will be the last quarter where we need to adjust for same-store results as Gold Strike closed in February of last year. In Macau, we lapped what was really the start of the recovery last year and achieved another record with net revenues up 71% year-over-year. MGM China earned its first ever $300 million quarter in adjusted property EBITDA, along with market share of 17% surpassing the previous record set in the fourth quarter. Given the strength in MGM China's operating performance over the past 15 months, MGM China and MGM Resorts both agree there is no longer a need for MGM to support its liquidity. And in March, the subordinated loan agreement was terminated. Further, the revolving credit facility has been nearly paid down and dividend payments have been resumed with approximately $94 million to be paid to MGM Resorts in the second quarter, all very encouraging. Aligned with our ongoing commitment to fortify our balance sheet and bolster liquidity, we recently completed the closing on the offering of $750 million of senior notes due 2032 at 6.5%. These proceeds were used to repay our 6.75% 2025 notes. Sarah Rogers and her team did an exceptional job, and the refinancing not only extends our liquidity profile but reduces our interest expense annually. Finally, in Japan, along with our partner, Orix, our venture closed on the JPY 530 billion project financing for MGM's Osaka Integrated Resort. This was the largest project financing ever in Japan and one of the most significant integrated resort financings globally. With this important milestone achieved, we'll continue to develop as a soon-to-be iconic resort. We also bought back over $500 million of shares in the quarter, and as of yesterday, we've reduced our outstanding float to 313 million shares, 37% fewer than the start of 2021. I'll close with a summary of our financial growth algorithm. Our resort operations generate both significant and recurring cash flow. In 2023, cash provided by operating activities was $2.7 billion and free cash flow was $1.8 billion, of which MGM China accounted for $830 million of net cash from operating activities and $45 million of capital expenditures. This implies around $1 billion of free cash flow domestically. We expect to see benefit soon from our digital business with BetMGM beginning to generate significant free cash flow in the next couple of years and LeoVegas beginning to generate returns from its investment period. This free cash flow generation will fund future growth and opportunities where I expect minimum mid-teens returns. This includes international digital expansion as well as brick-and-mortar development. In the longer term, we have an enviable pipeline of limited license development projects in New York, Japan and potentially the United Arab Emirates which will drive free cash flow growth over the next decade while also diversifying our geographic reach and earnings sources. Any excess cash generated beyond these projects within the constraints of our financial policy will be returned to shareholders through share buybacks. Collectively, we see this algorithm driving the compound annual growth rate of free cash flow per outstanding share to be in the mid-teens through 2028 while also investing in the Japan Integrated Resort. Bill, over to you.

Thanks, Jonathan, and good afternoon and good evening, everyone. I want to share some key insights as we consider the business and highlight important aspects from the recent quarter and our future outlook. We are thrilled about achieving a record first quarter and the excitement it brings, reflecting the diversity of our operations across Las Vegas, our regional properties, Macau, and our digital sector. Our recent performance in China is particularly noteworthy, with our EBITDA nearly up 80% and a whopping 140% above 2019 levels. In Las Vegas, we continue to see strong results, especially at the high end, which contributes significantly to our adjusted property EBITDAR. The focus on creating a luxury campus at the heart of activity is yielding positive results, and we’re optimistic about its future potential. Marriott has had an excellent start, booking around 75% more than expected, with over 140,000 room nights secured. The group business has been a pleasant surprise, exceeding our expectations. Kudos to our team, as our Net Promoter Scores are at an all-time high, and we've maintained robust margins, with Las Vegas margins hitting 37% last quarter. The team has been exceptional, achieving more with less. Regarding capital allocation, as Jonathan mentioned, we have a credit facility in Japan amounting to about $3.6 billion, marking the largest private financing in the country’s history, with 60% hedged against currency fluctuations in our favor. We've been proactive in leveraging our balance sheet, with a 37% share buyback completed, and we plan to continue where we see value. Las Vegas has had another strong quarter, mainly driven by our high-end offerings, although we noticed some fatigue at the lower end of the market. Overall, the average daily rate has risen 7% in the first quarter, and we expect to maintain this trend. We are excited about our newly completed connections between Cosmopolitan, Vdara, and Bellagio, with further plans to enhance access at the front of Bellagio. We're also adapting to changes in the market, particularly with the Tropicana closing and developments around Allegiant Stadium. With multiple venues nearby, we have significant access to various entertainment events, drawing in considerable traffic. Our convention business is rebounding, particularly from the tech sector, and as such, our group forecast for 2023 is up by 6.5%, with a year-to-date production increase of 29%. Mandalay Bay recently had one of its best months in history, which speaks to our team’s exceptional efforts. Despite challenges, we have maintained strong margins. I want to mention the wage impact, which has been about 11% across Las Vegas and the company. Starting June 1, we will begin implementing wage increases stemming from a recently negotiated deal. With the closure of the Tropicana and pending developments at the Mirage, we don’t anticipate any new inventory in the near future, which we believe is beneficial for our existing players. In the regional markets, despite a slow start to the quarter due to unfavorable weather, we've seen improvement, with our market share reaching 47% in March. I'm proud of our team’s efforts to maintain a 30% margin amidst these changes. In Macau, our performance remains strong, capturing 17% market share with record EBITDAR. We recently declared our first dividend since 2019 and noted potential improvements to visa regulations that could boost visitation. We're undersupplied in Macau, prompting us to add new villas and launch a new show from a renowned producer. Our museum project is also underway to enhance our cultural offerings in the area. Turning to our digital segment, we are making strides with BetMGM and focusing on product integration and enhancements. Single account features will be available soon, and we've expanded our betting options for various sports. Outside the U.S., LeoVegas is rebounding in Sweden and BetMGM's expansion in the U.K. is seeing positive results. We are also exploring opportunities in the Netherlands with a soft launch. Our digital strategy remains focused on self-sustainability and developing our own games. Exciting developments include the upcoming launch of live dealer services from Las Vegas. On our development pipeline, we've secured financing and are eager to commence construction, with plans for a 2030 opening still on track. We're also keeping an eye on opportunities in Abu Dhabi and Dubai, while remaining optimistic about prospects in New York and evaluating the possibilities in Texas and Thailand. In conclusion, the diversification of our products and business has been evident this quarter. Macau has driven growth, Las Vegas has performed well, regional businesses are on the mend, and our digital segment is fully funded. I look forward to discussing these developments further and will now open the floor to questions.

Good afternoon, everybody. Bill, the early experience with Marriott and bookings there is positive. Obviously, Tony Capuano mentioned that this morning on Marriott's earnings conference call. I was hoping you could just talk a little bit about what you're seeing so far. I know it's early in terms of out-of-room spend with these bookings compared to maybe either the bookings they're displacing or with just MGM, and this is more of a specific Las Vegas Strip question. And then further to this, is it helping more on the high end? Is it potentially serving as a buffer on the low end? You obviously referenced low-end fatigue in your prepared comments?

Yes, Joe, it's Jonathan. I'll offer a couple of observations. First, as you noted in the premise of the question, it is early. I mean, we're off to a great start with over 130,000 rooms booked. We've actualized over 50,000 of those so far. What we're seeing now is a higher premium than we had figured when we were going into this deal, breaks down between rate and the on-property spend. But between the two of those, right now, it's around $150 higher than the rooms that we believe are being displaced by this occupancy. About 100 or so of that is on rate and about $50 premium on on-property spend. So that's all with the caveats around it being early, but that's what we're seeing. And I'll offer one comment and then maybe Bill or Corey want to comment on the group side of this equation and that is that it really is the leisure customers that we're displacing coming through other channels, but they are across all of the businesses, including our regional properties.

Yes. The properties are performing well, and there is consistent booking across the portfolio. Bellagio is leading in performance, and we're also noticing an increase at our legacy properties. Additionally, Borgata is experiencing notable growth. Overall, we are very satisfied with the trends we are observing throughout the portfolio.

And regarding the group, we've received tens of thousands of referrals. Interestingly, we weren't aware that 80% of these referrals were new to us. The majority of this business is moving midstream. MGM has, at this early stage, emerged as the largest beneficiary of bookings in the group segment. While we have 13 GSOs, they have 1,300, which is significant.

And then my follow-up question, maybe more geared towards Jonathan. About a month ago, there were news reports of potential efforts to divest certain regional assets? Obviously, if there was something to update us on, you would update us in the press release. But more of my question is about the strategic thinking in terms of how you go about and maybe thinking about pruning the portfolio domestically and what are the certain characteristics or considerations that you think about when thinking about this?

Sure. I appreciate the question. Clearly, we can't comment on anything like those reports you referenced. But look, we're always looking at the portfolio to understand how it fits in overall with that strategically. Things that are very important include market positioning in markets that we believe have strong potential for growth. Overall scale because this is a business where most of our properties, including our regional properties are doing north of $200 million annually EBITDAR. So scale matters. And then finally, the way in which all of our properties interact with the whole importation of business into Las Vegas, the linkage with our digital businesses, et cetera. But those are the general lenses through which we look at the portfolio and how they fit in with the strategy.

And Joe, I would like to add one more point. The properties that show not just organic growth but also significant growth potential in various ways are important. However, if they do not show this potential, we may need to consider a different perspective.

I was hoping we can maybe just drill in on digital a little bit. So maybe one kind of specific and then one strategic. The specific question would just be, can you help us think about the loss cadence? I think we've been very clear here that 2024 would be an investment year again. So just help us think about how some of those investments may play throughout. And is there some additional marketing, especially in the second half as you get the product to, I think, where you want in the Angstrom integrations kind of done? And then maybe the strategic question, just to hit it all at once would be a big picture here. Kind of what more would you look for in digital? Are there some things on the technology side? And/or is it more of the market expansion side that you're kind of looking to expand upon digitally?

I'll address the first part. Regarding BetMGM, your observations are quite accurate; we are eager to see the product development progress throughout the rest of the year. The goal we’ve discussed is to focus on our position by the year's end, especially during football season and afterwards. The first quarter was challenging for everyone in digital; there weren’t many successful Super Bowl or March Madness bets, and we’re not alone in this situation. Despite that, I believe the plan we have discussed remains valid. Looking ahead, there is considerable work to be done, especially with developments like Angstrom and product delivery. We are pushing into around 40 states with sports betting, and iGaming presents significant long-term opportunities. We operate notably in five states and three that truly make a difference, indicating substantial potential for growth, which we strive to pursue every day. On the digital side of our LeoVegas business, it involves extending the BetMGM brand and understanding its significance in established markets. Notably, we see real growth potential in South America and LATAM as we aim to establish ourselves in the right regulated markets. This won't happen overnight, but we are optimistic about our positioning, the products we offer, and the foundation we’ve built, especially as we plan to stabilize and grow that business. We are excited about our future prospects.

Jonathan, just doubling back to some of your comments earlier in the call. Obviously, good ADR growth in the first quarter, rates pacing up for each subsequent quarter grew pacing well. Obviously, as Bill mentioned, we lapped the big headwind with the union contract, the incremental expenses. As you guys think about the rest of the year and all the puts and takes, be it hold comparisons from last year, easy/hard et cetera, events last year, although that should pretty much normalize right now in the book of business that you currently have with some known expenses and where they're going, obviously, going up but less heartily as they have been. Do you look at the outlook for the rest of this year and believe there's potential for Vegas Strip EBITDAR to grow as you work through the year?

Yes, is the simple answer. As we look not only to the leading indicators that we have in our book of business, but also the initiatives that we have underway. And yes, we are confident that we can grow EBITDAR in Las Vegas this year.

I know you have made some updates to the slide deck materials, making them very user-friendly. Will the Hong Kong filing include similar information as it has in the past regarding MGM China for modeling purposes?

Yes, it will.

And will that be out at some point this evening?

Yes, in about 30 minutes. I'm told.

I wanted to follow on in the digital train of thought. And when we last spoke publicly, there were notions about potential further tuck-ins and some potentially of some meaningful size and continuing to grow that business through some acquisitions. I'm not sure that you touched on that today. And I just wanted to get a sense for what that thinking might be.

I didn't on purpose. There are some contemplated tuck-ins coming down the road. But for now, I'm just going to leave it at that. I think I stated on the earlier call, we're anxious to solidify something in sports. We like content businesses. We're anxious to get into the live dealer business. And so none of that's changed. And so I think you'll see us over the course of time here, do things that will further solidify that strategy and get us deeper into those objectives.

And if I can just follow up on BetMGM, right? There's a lot of your sort of commentary and vision for BetMGM has progressed appropriately, but in a steady way where from afar, it seems like there's a lot of fluidity on your partner side. And my question is, has there been any near-term sort of positive change in sort of how they're approaching the business, executing on the business, et cetera, beyond what you mentioned in some of your prepared remarks?

Yes. Look, I think Stella, their new CEO, is the breath of fresh air. She's been extremely transparent, she took Adam Greenblatt, who is the CEO of BetMGM, to India to get under the covers, to meet with the design development teams. So she had him speak at a town hall about the importance of BetMGM and all that mattered, and so we're excited by that. We think it's movement in the right direction, and it's something that, frankly, heretofore hadn't happened. And so that's all affirmative and positive. Everyone is agreeing to the roadmap. It's an extensive roadmap on product development, and it's going to take some time and energy and some investment, particularly on Entain's behalf, and they're fully supportive of that. And so yes, I think things have changed, and I think for the much better.

So first question is on Las Vegas. Maybe you could reconcile or help us reconcile the slot volume trends that you saw in the quarter versus the really strong room rates? And I guess what I'm asking is, is there any sort of behavioral shift for customer trend shift going on under the surface? And what's driving that? Can you talk about the trade-off between those two factors? And how much control you have over that shift?

Yes, I'll start, and John can add if he'd like. During the quarter, our convention mix increased, and with the Marriott integration, we strategically decided to reduce our presence in the lower end of the casino market. We believe that the revenue we lost on the slot side was compensated by gains in the hotel and convention revenue.

My second question is about MGM China. Bill, you mentioned the competitive environment there. Your market share in January was notably high, but your average market share from the mass table over the quarter was clearly lower, indicating a decreased exit rate. I'm interested in your thoughts on the January market share and what led to the changes. It seems that the high share wasn't lasting, so how much of that was due to hold? Additionally, what can you share about the market share exit rate as we move into the second quarter?

Let me deflect to Kenny and/or Hubert here. I think most of it was tied to hold in January, but gentlemen, correct me if I'm wrong.

Yes. You were right. And we have also had some VIP place in January. So that was a major reason that we reached 20% market share in January, but definitely all of all is in mid-teens as we always said in our previous calls.

The exit market share rate for March was 15.8%, and we're pretty much stable on that front. And we see a little higher number in April around that.

I wanted to start with capital allocation. So you purchased another $0.5 billion worth of stock in the quarter. Can you just update us? I know you said there's 17 left on the plan, but how you're thinking about opportunistic versus programmatic over the next couple of quarters?

Thanks, Chad. And again, I apologize for the interruption there. Yes, we did $500 million in the first quarter. It will be programmatic for the remainder of the year. That being said, we are looking at some upcoming equity investments later this year and into 2025 in our project in Japan. So that will certainly have some bearing on our share repurchase activity. But we do have, by our calculation, about $1.2 billion in excess cash right now. And so at these values, share repurchases will continue to be a meaningful part of our capital allocation program.

And then on the regional margins, I know there was a lot of weather interruption in January. Can you help us think about maybe the March exit rate, how that looks from a year-over-year perspective? And if you expect that to be stable on a go-forward basis?

I'll cover it. March was an exceptional month as we saw it play really come back, and the exit margin there was at 35%.

But I wouldn't suspect that to sustain, let's be clear.

I appreciate the longer-term thought process on the mid-teens free cash flow algo. But hoping you could peel back the onion a bit there as we think about tracking this going forward, what would be the underlying growth that you'd think through in Vegas versus the regions versus MGM China, kind of separating that out from BetMGM or new markets. And I think I heard you say through 2028. And I guess is that the right bookend? Or is that just more of a long-term thing?

Yes. We believe that the domestic operations can continue to grow, both in Las Vegas and the regions in the mid-single digits over that time frame. Now that's organic growth. We do have plans for some additional growth capital investment in Las Vegas mainly, which would increase that growth rate. We think the growth rate is that or higher in our China operations. And then the reason we use the 2028 time frame is in that time frame, while that would capture our expected investments in the New York market, it would not capture the returns on the investment in Japan. But we just think that, right now, a 5-year time frame is what we use for our internal planning, and that's what we think is reasonable to introduce when we talk about our compound annual growth rate of free cash flow per share.

And maybe one other quick follow-up. Just on BetMGM, you've said in the past that it's going to be self-funding from here. Is there anything that you'd be looking for where you'd say this is something that we would want to invest in to contribute to BetMGM or provide them with additional capital for any reason?

Yes. Well, there's a couple of potential things. Look, obviously, not that California is going to happen anytime soon. But if California were our other large markets, Texas, et cetera, Georgia could probably be another one you could put into this boat. We would be aggressive there, like I think all others would be, and so that would take some capital. And so we would never say never to be clear. And I'm speaking on behalf of MGM in terms of its growth and what it wants to do with that business. And so I think for now, as we think about this year, the plan that we put forward is going to hold. If we get the product really right, we see an opportunity to lean in, we will. I don't necessarily know what it will do to the cash. It won't be meaningful. And so only some other or some acquisition comes along that we think BetMGM might be ripe for. But I think the way to think about it is the projection we have out there is probably a pretty safe projection for now.

Maybe to start off on a high level, Bill, you've mentioned some of the opportunities you're observing in Thailand, the UAE, and Texas. We're also aware of the current situation in New York and Japan. Could you share additional insights on the other markets and let us know which ones you are most excited about or believe have the best chance of developing in the next couple of years?

I believe the market in the UAE is likely to develop, as there are enough signs indicating progress, particularly in Abu Dhabi or one of the other Emirates. Winn already has a project underway and is just waiting for legislation and regulatory approval. Thailand is also interesting, as it remains under government control, but the discussions so far have been positive. The costs and potential margins there could be very attractive, although I prefer not to get ahead of the situation. Texas remains significant among the few key states in the U.S., with four major cities being considered without revealing our strategy. Many are focusing on one of those cities, including us, and we are actively monitoring developments. However, I wouldn't expect anything immediate in terms of brick-and-mortar in that region.

And maybe a follow-up more on BetMGM and the rest of the portfolio in the omnichannel strategy. It's kind of been a little bit of a focus. I don't know if we've talked too much about it today. So curious if you can share some updates on what you're seeing in terms of crossover play and then maybe in the context of an event like Super Bowl in Las Vegas with a big draw. And now that you've got kind of tentacles around the whole nation through BetMGM, I'm curious how you're seeing those trends play out.

I think the notion of omnichannel and the notion of people that play back and forth is about 15% of BetMGM's database give or take. Until we get this single account, single wallet in Nevada, I don't think it's as meaningful as it could and potentially will be. I think that can be very meaningful long term for us because it's a unique position we would have here, particularly over the other leading contenders in this space. And obviously, we see a whole bunch of visitors every year here who have intent. And so for things like Super Bowl, et cetera, it would be important. But we have done a meaningful job and a good job in Super Bowl is the example of inviting, reaching out and making sure that BetMGM's VIP clientele are well catered to, and we hosted several of them during that event in particular, private party tickets to the game, et cetera. And so that activity will continue. It's really when we get single account, single wallet set up, and some more connectivity between MGM Rewards and BetMGM's loyalty system that you really see some traction.

I think it's also notable to mention that we had about 1 million sign-ups for MGM rewards during the quarter, an all-time record; 600,000 of those came from BetMGM.

Can you provide some insight into your EBITDA outlook for Vegas this year? Specifically, I’m interested in any quarterly trends you might anticipate. Would Q3, due to the comparison with last year's cyber hacking, potentially show the most growth? Is that how we should be thinking about it? Additionally, Bill made a comment regarding potential further capital investment in Vegas, and I’d like to know more about what that might entail.

Sure. We, right now, think we'll be able to grow EBITDAR in Las Vegas in each of the next three quarters. And you're correct to note that the third quarter will probably represent greater growth relative to the second and the fourth quarter, primarily because of the incident last year. And then on the capital question.

Yes, I'm sorry, Robin. I often never finish. I will go through that in some detail next quarter. And I think you'll find it all very interesting. And so if you could give me the privilege of that time, that would be great.

We've been hearing more about outbound China picking up more recently. To what extent are you seeing that in Las Vegas? And particularly as it relates to the impact, is that part of that growth outlook that you've kind of laid out here for 2024?

I make a macro comment. The challenge with China right now, we're about 30% recovered in terms of volume of people to fly in and out of China; if you have to fly over Russia, there's an economic burden if you can't fly over Russia. And so that puts pressure on packaging, tour, leisure, et cetera. And so until that's resolved, i.e., Ukraine, I think that challenge is going to exist. I had the good fortune of being in China about a month ago. I actually had the good fortune of meeting with President Xi and talking about this very subject. He is open to people-to-people exchange as he referenced it in a meaningful way. But I think we all have that bit of a hurdle. And then Corey, I don't know if Chinese New Years was good, but go ahead.

Chinese New Year's was good. For the first time since COVID, we saw an increase in million-dollar customers on the high-end side. This is a positive sign. However, we are still only about 55% of our high-end performance in China compared to 2019. Recently, we had a group that visited Vegas before attending the Masters, indicating some encouraging results.

And then just pivoting to Macau. I think flow through in the quarter was around 30%. I know you've talked in the past a little bit about margins and expectations there. But is that kind of the right way to think about it going forward as we kind of fill out in terms of the recovery?

Yes. I think like basically, as we always said, in our calls, we are targeting about like a high 20s, around 30% of our EBITDA margin. Based on the current business trends, we feel comfortable with such kind of expectations.

I want to start with Macau. Could you maybe talk a little bit about the specific benefits you're seeing with your smart tables there? Should we expect any impact to market share once competitors get those tables? And I guess, is there any opportunity to use that technology in any of your markets?

Go ahead, Hubert.

There are several benefits to smart tables. Firstly, they enhance game security since everything is monitored, making it extremely difficult to cheat. We have instances where players thought they had outsmarted the system, but once the chips returned, they were caught. Additionally, they improve operating efficiency by requiring much less supervision. From a basic operational standpoint, the ability to track all plays provides us with a wealth of data, which enables precision marketing tailored to different customer play levels and allows us to offer real-time rewards. This capability also facilitates the development of new games; for example, we have already introduced an insurance bet in this market, something that would be impossible to manage manually. This technology is also well-regarded by regulators. Many are striving to implement similar systems, and we believe we have a significant lead in both implementation and in leveraging this technology to execute various programs.

Kenny, do you want to add anything?

I want to emphasize that we had this technology in place as early as 2016. Many people ask how we are leading this market and why our recovery after COVID has been so strong. What sets us apart is that, as a company, we have a deep understanding of our customers, particularly in the premium mass segment, paying close attention to their culture, habits, behaviors, backgrounds, and even dialects based on their home provinces. China is a vast country with an abundance of resources, including cutting-edge technology and various hospitality products. Over the past three years, we have continuously innovated and upgraded our offerings to meet the shifting expectations of our customers. Recently, we launched two Casino outlets in April, which have received positive feedback on social media and from our customers. We encourage everyone to visit us in person to see our initiatives and the details of our progress over the past few years. That concludes my thoughts on our competitive performance.

And then maybe just as a final question. Bill, when you look at the M&A environment right now, is there anything interesting for you strategically on the buy side within land-based gaming and the regionals or even Vegas?

Barry, if I could respond to that, I wouldn't. However, there are always interesting developments. In Vegas, we have a lot on our plate, as you know. The good news is that we are well-informed about most happenings out there. But no, there isn’t anything immediate that stands out as a remarkable opportunity at this time. That's why our focus is on new markets and our digital business. Ultimately, given our significant free cash flow, we will continue to buy back shares to return value to shareholders when we don't see better uses for the cash. We’ve already done quite a bit of that. I think this reflects our performance, and while the comparisons from the last quarter were very positive, such opportunities are limited.

Thank you, operator, and thank you all for joining us. Sorry for the glitch in the middle of this. We're not sure exactly what happened on either side. As we talked about, obviously, a well-balanced portfolio. We think we've got great pillars in the ground in these four specific locations, Las Vegas, Regional, Macau and Digital. We think if you think about Las Vegas, we have luxury, we have convention, we have value. And we're literally in the epicenter of the entertainment offerings, both current and future. And so we're very excited by that. While we are third in digital, in BetMGM, we are #1 in brick-and-mortar operators who have entered this space. And so this is a highly competitive space. We're excited by where we are and what we're trying to get to. Much work to be done there and frankly, some catch-up to be done there. And we recognize it as well as our partner does. And so we're excited by that. We'll keep you all posted as New York and hopefully, UAE become a reality and same with Thailand and/or Texas. And in the interim, and I just said it earlier, but to the extent we have free growing cash flow, and we do, we'll continue to return it to shareholders when we don't think there's anything better to do with the cash. So I thank you all, and have a great evening.