Churchill Downs Incorporated
Q1 2020 Earnings Call Transcript

Published: 30 Apr 2020

[Operator:]

Good day, ladies and gentlemen, and welcome to the Churchill Downs Incorporated 2020 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, this conference call is being recorded.I’d now like to introduce your host for today’s conference, Mr. Nick Zangari, Vice President, Treasury, Risk Management and Investor Relations.

[Nick Zangari:]

Thank you, Stephanie. Good morning and welcome to our first quarter 2020 earnings conference call. After the company’s prepared remarks, we will open the call for your questions. The company’s 2020 first quarter business results were released yesterday afternoon. A copy of this release announcing results and other financial and statistical information about the period to be presented in this conference call, including information required by Regulation G, is available at the section of the company’s website titled News, located at churchilldownsincorporated.com, as well as in the website’s Investors section.Before we get started, I would like to remind you that some of the statements that we make today may include forward-looking statements. These statements involve a number of risks and uncertainties that could cause actual results to differ materially. All forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC, specifically the most recent report on Form 10-Q and Form 10-K. Any forward-looking statements that we make are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events.During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today’s earnings press release. The press release and Form 10-Q are available on our website at churchilldownsincorporated.com.And now, I’ll turn the call over to our Chief Executive Officer, Mr. Bill Carstanjen.

[Bill Carstanjen:]

Thanks, Nick. Good morning, everyone. With me today are several members of our team, including Bill Mudd, our President and Chief Operating Officer; Marcia Dall, our Chief Financial Officer; and Brad Blackwell, our General Counsel.Just nine weeks ago, we shared our 2019 year-end results and our growth plans for 2020 and beyond. We talked about the exceptional year we had and we were just as excited as we looked forward. As we’ve all seen however, the global pandemic COVID-19 has changed lives throughout the world and inflicted harm on our citizens, our economy, and companies throughout America. If there’s one point, I’d like you to understand today, it’s this. When the relevant government authorities permit the reopening of our businesses, Churchill Downs will be prepared to do so following all the best-in-class policies and protocols to keep our customers, employees, and communities as safe as we responsibly can.Our team has determined to attack the challenges imposed by COVID-19 and manage through them with determination and creativity. As the daily routines of Americans changed over the last month, so did the business landscape for our company. Over a period of several days, we closed all of our gaming properties. We also discontinued racing at Turfway Park and Fair Grounds racetrack are only two tracks conducting live racing at the time. We elected to keep the backstretch of these facilities open in order for the horses and the people, who take care of them to have a place to stay. It was the right thing to do.Prior to closing our properties in March, our company had experienced very strong results. While our final first quarter numbers were significantly affected by the closures of our brick-and-mortar operations as will be our second quarter, we immediately took the necessary actions to reduce a broad array of expenses and ensure in significant liquidity.With our exceptional balance sheet and careful focus on managing cash expenses, we were strongly positioned to weather this period and we’ll emerge a more efficient and focused company with a strong roster of growth opportunities. Today, I’ll update you on several important topics and then Marcia will walk you through the financials for the first quarter and provide an update on our capital management and liquidity. Then we will be happy to take your questions.I’ll begin with an update on the Spring Meet at Churchill Downs Racetrack. After careful collaboration with the Governor of Kentucky, Andy Beshear and the Kentucky Horse Racing Commission, we’ve developed a series of comprehensive safety protocols, under which we will open the backside of Churchill Downs Racetrack on Monday, May 11, and begin live racing on a spectator free basis soon thereafter on a date we expect to announce shortly.We are among a very limited number of businesses to open in the first round in Kentucky and our team has worked very, very constructively with the Governor’s office to earn that privilege. Racing with spectators and of course, opening Derby City Gaming will follow as soon as the relevant authorities concluded as safe to do so. We support their careful and deliberate process and we’ll continue to be active and constructive participants in the development of the appropriate protocols.As a result of the closure of our gaming properties, we have significantly reduced our maintenance and growth project capital expenditures for 2020. We have eliminated nearly all maintenance expenditures except for mandatory items until our properties are reopened. Regarding growth project capital, we have elected to continue investing, where it makes sense and stop where the timelines to completion are far out, the bulk of the expense has largely not yet been incurred or in the case of hotel developments, we need to revisit assumptions regarding the occupancy rates and travel patterns going forward. I will talk about the larger projects, one at a time.Oak Grove HRM facility and hotel, we’re going to finish the historical racing machine and hotel facility at Oak Grove with a planned opening of September 1 or as soon thereafter as permitted under state and local protocols. We have put the equine events center, outdoor concert venue, and other non-core still unfinished elements of the build-out on hold for now. We will be incorporating a combination of Ainsworth, Scientific Games and IGT historical racing machines into this facility when it opens.Turfway Park and the Newport Extension, as you saw in our recent press release, we’ve received the required approvals to build a simulcast and historical racing machine facility in Newport, Kentucky under what is referred to as an extension of the racing license associated with our Turfway Park facility nearby in Florence, Kentucky. This is analogous to our Derby City Gaming property, located close to and associated with Churchill Downs Racetrack.We will build a Newport Extension in an existing shopping center and we hope to open in the fourth quarter of 2020. The revenue generated from this facility will support the purses for future live race meets a Turfway Park. It will open with the simulcast area, a gaming floor with approximately 500 historical racing machines and a bar area. This creates 70 full-time equivalent jobs in the Northern Kentucky area.As a reminder, the Kentucky Horse Racing Commission had recently voted to amend state regulations to allow for Kentucky licensed racetracks to have a second location to conduct simulcasting and historical racing under certain conditions subject to their approval. Ultimately, the addition of the historical racing machines at Derby City Gaming, Churchill Downs Racetrack, Turfway Park, its Newport Extension and Oak Grove will significantly increase jobs and tax revenues in the Commonwealth, increase the purse money for the horses that race at our racetracks, attract more money to be wagered on our races, because of the increase in the quality of our racing product and increase the value of thoroughbreds for breeding purposes, which is all good for the Kentucky horse industry as well as for the Commonwealth of Kentucky.While we are proceeding with the Newport Extension, we will continue with the initial stages of our main Turfway Park historical racing machine facility. Right now, we are demolishing the existing grandstand and we’ll replace the current artificial racing surface with a new state-of-the-art artificial surface called Tapeta. We have placed a temporary hold on the continued architectural design phase of the new grandstand and historical racing machine facility while we complete this initial work. We are not surrendering much time from the completion date and certainly, it makes sense to balance conserving cash with ordinary course growth project – growth capital efforts.We can pause on the design work without losing much time so we have. As the state opens up and we complete the tear down of the existing grandstand and the installation of the new racing surface, we expect, we are likely to pursue the next phase with all deliberate speed.Derby City Gaming smoking patio, we also announced that we will be adding a second outdoor smoking patio on the south side of our existing Derby City Gaming facility that will provide for approximately 200 additional historical racing machines by early fourth quarter of 2020. Our existing smoking patio outperforms the gaming floor and it is clear we will substantially benefit from more smoking positions. We will be able to incorporate more of the new titles from our two new suppliers of machines, scientific games, and IGT through this expansion. We introduced 24 machines from scientific games on the Derby City Gaming floor in late February and we’re very pleased with their performance.Rivers Des Plaines casino in Illinois, the Rivers Casino is in the process of building a parking garage in connection with the recent authorized gaming expansion allowing for an additional 800 positions. It’s already 90% complete. As you might remember, 130 additional positions were added in the fourth quarter of last year to the existing facility. We have now paused on the planning and execution of the expansion necessary to accommodate the additional 670 additional positions. We have also paused on the parking garage, but that is a decision we will continue to think about given it is fairly far along and is a prerequisite to the expansion to absorb the other 670 positions.Miami Valley Gaming, we had previously announced that MVG would be expanding their gaming floor, adding a garage and adding a hotel. We’ve put this on hold for now. Churchill Downs Racetrack, we’ve completed the quarantine barn and medical equine facility. We’ve also completed the high-end renovation of the sixth floor area, which is next to and comparable to our exclusive mansion area. This new space is called the Matt Winn’s Steakhouse and seats approximately 350 people.We have decided to delay further build-out of the hotel and historical racing machine facility at Churchill Downs Racetrack until we have better visibility into the full impact of the COVID-19 pandemic on the regional economy and until after we have completed these next two derbies, which will now be run in fairly rapid succession this September and then next may. We remain extremely committed to investing in the build-out of Churchill Downs Racetrack. However, we feel it is prudent at this time to pause this investment until we have greater clarity on timing for a return to economic stability. As this is a project, where a lot of cash would be going out the door for construction with the revenue from opening still 18 months or more away, it really makes sense from a cash perspective to hold onto the funds for now, Churchill Downs Racetrack Virtual Derby Party and the 146th Kentucky Derby.We announced last week that we have partnered with NBC to develop and host a day long at home Kentucky Derby Party on May 2, the original date for the 146th Kentucky Derby, with the goal of raising $2 million for COVID-19 emergency relief efforts. Viewers of NBC’s broadcast from 3

[Marcia Dall:]

Thanks, bill and good morning everyone. Our leadership team has always had a commitment to maintaining a strong balance sheet with relatively low leverage in relation to others in the gaming industry and the capital structure that provides flexibility to support organic growth and enable our business to be nimble through different economic cycles. Our focus on our three core segments

[Bill Carstanjen:]

Thank you, Marcia. Stephanie, I think at this point, we’re ready for everybody’s questions. Stephanie, can you please open the call for questions?

[Operator:]

Thank you. [Operator Instructions] And your first question to the line of Dan Politzer with JPMorgan.

[Dan Politzer:]

Hey, good morning everyone and thanks for thanks for all your commentary.

[Bill Carstanjen:]

Good morning.

[Dan Politzer:]

So, my first question is on the Derby. Is this is relatively high level? but obviously, we’re in uncharted waters here in terms of uncertainty. I was hoping you could maybe, get some high level thoughts on just how you’re thinking about what the event may look like in September. And bill, I know you mentioned there’s protocols and procedures in place that you’re looking at for safe and responsible spectator event. I mean, are you considering a social distancing offense? Is there any chance you would conduct the race without fans in the standard or is there an alternative setup? Just wondering some high level thoughts here.

[Bill Carstanjen:]

Sure. good morning, Dan. So first, it’s still four months away and I think we see every day new events and changes, and new examples of what other people are doing. Another thing that we pay a lot of attention to is what is the progression of the pandemic and I’ve been pleased to see in Kentucky, for example, over the last week on a weekly comparison basis. new hospitalizations have dropped by 75% from about 80% a day down to less than 20%. And about 4% of the hospital beds in the state are currently occupied by COVID-19 patients. That’s about 4%. So, somewhere around 250 people in this state are in the hospital for COVID-19. And so that’s just an example of data we track and it’s good to see the general progression of the data in our area.And certainly, if there are material changes in that data, particularly, for the worst, then we would have to revisit lots of assumptions and lots of planning. But recently, the data, at least in this area has looked promising. But of course, the Derby is an international or national event. So, there’s lots of data to track. But generally, what the future looks like over the next four months is going to be a reflection of the policies and procedures, and the protocols that have been put in place by the various states and localities, and the effectiveness of those policies. And so far, we see a lot to be happy about. There have been a lot of good decisions that have been made by leaders including those in this state. So, without being able to address every potential hypothetical, I would say in general that it’s fair to expect even under the reasonable cases and the best cases scenarios, it’s reasonable to expect over the next four months and after four months, we’re still going to have protocols.We’re still going to have differences. There’s still going to be social distancing issues. There’s still going to be other processes and protocols. We’re going to expect companies to follow and our customers to follow in order to hold a safe event. And we’re committed to working with local authorities and with our customers and team members to make sure that we implement those protocols, but I think what those protocols will ultimately be. We’ll have to see there are a lot of things yet to come, but we always caution our team members to not overreact to every clickbait article that’s out there, but just to calmly progress – process through the data and work with – the authorities work with each other to just make sure we reflect best-in-class practices. So, whatever’s capable of being done in this country in four months, whatever can be done, whatever is the maximum acceptable processes and protocols, that’s where we’ll be. That’s what we’ll be offering and that’s what we’ll do.So, I’m fairly optimistic. I’m more than cautiously optimistic. I am optimistic that we’ll find a way through this. But again, I can’t sit on calls like this and address every potential hypothetical or give you a crystal ball and say that things will be great in the country. I would say in general, a lot of really good decisions have been made by really strong governors that have put the country in a position, where they have shown improvement in some of the metrics that will really matter – not only now, but four months from now.So, I think in our state, it was really gratifying to work directly with Governor Beshear on the protocols to open up Churchill downs Racetrack. If you’ve seen some of his commentary, he was complimentary of us with respect to the comprehensiveness and the complexity of our processes to keep everybody safe that comes on our property. And that’s just what you can expect from us going forward. So Dan, you may have a follow-up on that. But when you sit in this chair, you have to – I have to balance conveying accurate information without sort of drifting down any potential hypothetical that we couldn’t even quantify on a call like this.

[Dan Politzer:]

Yes. I completely understand and I appreciate the color. I guess, I guess continuing with the Derby at least, could you maybe, get some color on what conversations have been like sponsors, broadcasters and premium seating customers given the move to September. and I guess maybe, what are some of the segments that may be more impacted than others across your revenue and epidemics?

[Bill Carstanjen:]

Sure. So generally, I’d say if you were familiar with our facility, for the listeners that are familiar with our facility out there, you’d know that we’re not like a football stadium perhaps in the sense that everybody’s not sitting shoulder-to-shoulder in a bowl, one after another in lines of people. Our facility has a – it’s well more than a million square feet and it has a variety of different environments.So, we have environments that are similar to high-end restaurants in terms of density and the core. We have a festival type atmosphere in the infield. We also have some stadium seats. But generally, you see a variety of different environments. And so the protocols for each of those will be different. I’d say our customers in general, I’ve been particularly humbled by the level of commitment to our event. Our customers remain excited that we offered refunds in the percentage of folks pursuing refunds, certainly was less than I expected.So, there’s still a great deal of excitement in our community and among our customers from wherever they come from in our event. And I think there’s an expectation on their part that we’ll work through whatever challenges are necessary to offer them the experience as close as possible to what they normally expect. I’d say that’s true generally with our sponsorships too, generally and I can only speak in generalities generally, when you’re – when I think about our network partner, NBC, and when I think about our major sponsors, there’s just been a real commitment to working with us, none of us a crystal ball. This pandemic has been an event that’s new to the world.It’s not just to America or to American companies. So everybody, I think, brings a sense of wanting to work together and wanting to see what the art of the possible will be. But I think Dan, just it’s important to convey when we talk about these issues with our teams, we remind them that nobody gives you anything. No one says it’s going to be easy. No one tells you that you’re entitled to something. We expect to earn everything we get. We expect to earn the right to hold our event. We expect to earn the right to earn our customer’s business. We expect to work hard to make this a positive, this event happening, we expect to have to work for it. So, I’d say our team generally, relishes the challenge, our morale, both among our sponsors and our partners and our team members is, let’s get on with it. We got four months to figure this out. We’ve got four months to prepare. Let’s do that.

[Dan Politzer:]

All right. Thanks. That’s helpful. And then I guess one last one, and this is probably for Marcia on cash burn. It seems like you’ve been pretty aggressive in cutting your expenses and your costs across your properties that they’re closed is to what extent, is this sustainable and I guess how many of these costs come? How much does this cost come back? So, ask another way, as we look out a few years down the road, assuming a more normalized environment, should we expect margins to maybe be better than they were in the last couple of years? And that’s it from me.

[Marcia Dall:]

Yes. Again, Bill just said, Dan, it’s really difficult to talk about hypotheticals out a couple of years. at this point, we’re really just focused on controlling the cost during this period of time. As I talked in my portion of the discussion, we viewed every cost of variable. That’s how the team approaches it on an ongoing basis, anyhow during our normal operating environment. And really, we’re focused at this point in time getting our businesses and our properties reopened going forward. So, we’ll have to see in two years, but the team has always been very focused on margins as you know, Dan.

[Dan Politzer:]

Yes. Okay. All right, guys. thanks so much for the color. I appreciate it.

[Bill Carstanjen:]

Thank you, Dan.

[Operator:]

Your next question is from the line of David Katz with Jefferies.

[David Katz:]

Hi. Good morning, everyone. Thanks for your commentary and candor. I’m sure we’d all agree that we normally work with an incomplete set of facts, but this is a little ridiculous. What I wanted to ask about was just going back to some of the commentary about CapEx; I believe that you said maintenance CapEx is $9 million in 1Q through February and no maintenance CapEx plan for the rest of the year. Would it be wise for us to estimate some kind of a bogey that is at some lesser rate through the rest of the year that there ultimately will be some over the next four to six months of this and that? And the second part of the question is really around the growth CapEx, which I think you said was one $180 million to $200 million for the full year with $39 million spent. How would you have us cadence that through the quarters, please?

[Marcia Dall:]

So David, starting with maintenance capital, I actually said that we’ve eliminated maintenance capital expending except for mandatory item, long lead time items and capitalized labor related to improvements of our TwinSpires technology platform until our properties are reopened.

[David Katz:]

All right.

[Marcia Dall:]

So, we spent $9 million on maintenance capital of the first quarter, right, of which almost all of it was spent before the end of February. And so I do think that if you were running a projection, you should assume some level of spend right in second quarter, with properties closed at this point in time related to those items there. I did not provide a number. It really is dependent upon when we reopened the properties and that’s why I said, we would give you an update at the next earnings call. We’ve given you a prior projection on our maintenance capital spending for the year that assumed that we would be open at our properties the entire year. So, that’s kind of the outer bounds of what the – what it would be if we’d been open the entire year. So that’s the extent that we’re willing to give guidance at this point in time.And then regarding project capital, David, I actually said $180 million to $220 million. And so I think your question was really the cadence of that. If you think about it, the majority of the spend is really going to finishing out Oak Grove and for that to be ready and this again, is a cash funds. So for that to be ready by the September timeframe, you can think about that as that’s really a heavy focus on second quarter and they’re really into third quarter. There may be some of that coming into the early part of fourth quarter. When you think about the Annex or Turfway, the extension for Turfway that also is going to be ready for fourth quarter. So again, I think it’s majority of the spend and the smoking patio as well for Derby City Gaming, those are all going to be sort of in the second quarter and third quarter of this year. There’ll be some that will fall into the fourth quarter, but not as much.

[David Katz:]

Right. And if I could just go back to the growth projects, which I appreciate your updates on them. I just want to be clear about the fact that as we sit here today as best as that we’re considering these on hold rather than canceled, right? I mean we’re – are we conserving cash or are we revisiting, I just was hoping for a little more depth on that please.

[Bill Carstanjen:]

Sure. David, this is Bill Carstanjen again. These projects are on hold. We expect to resume those. We expect to pick them back up. We expect to return to a growth trajectory for this company that is similar to the – to what we’ve done over the last number of years, but we have to do so prudently. We don’t have a crystal ball either and COVID-19 is something that nobody’s seen in several generations, a pandemic like this that’s impacted America like this. So this is just about being prudent. I’ve had the benefit of being around for a long time and I remember prior difficult economic periods and it’s something we’ve all sort of ingrained here within our – within Churchill and this senior management team.Cash is really, really important. And so when the economy took this turn, because of the pandemic, we went into a different mode. We want to make sure that we have adequate liquidity. We want to make sure that we manage our projects and our cash flow very, very carefully. We were very proactive very quickly with respect to reducing expenses and with respect to putting projects on hold and until we have better certainty and better clarity, that’s how we’ll run. Because having been through economic ups and downs before, that’s how you should do it in our opinion.So, this isn’t subtle commentary that we think these projects will never be viable or something like that at all. It’s quite the opposite. This is just prudent management of cash and candid recognition that we don’t have a crystal ball and we want better clarity on how this pandemic affects the economy, how long it takes to get a vaccine, how long it takes to develop treatment protocols. As we get better, we’ll be right back at it. We’re generally an aggressive group. But with that aggression comes a fair amount of prudence and some basic core principles like always understand your cash position, always understand your expenses and be quick to adjust if you see any weaknesses in your assumptions.

[David Katz:]

Perfect. And one last follow-up if I may for Marcia, which is, have you thought at all about, I mean, you have normally had a relatively conservative balance sheet in that kind of three’s range? Do you think it’s possible that you come out of this with a more conservative stance on it? Does two to three become the new three to four?

[Marcia Dall:]

David, I think that it’s a really, again, a hypothetical question. As everyone will see with the timing of the adjusted EBITDA movement, you will see leverage move up a little bit for our company at levels that we have historically not run at. And then you will see it come right back down in line. But we’ve never really, I think as a company, viewed it as we have to hit a target leverage. As we’ve talked in the past, David, it’s always about is it the right acquisition to make for all of the reasons as Bill has talked about in the past around what are the strategic filters that he and Bill, and others put deals through? And is it the right investment, organic investments for us to make us a company based on whether it’s going to create long-term shareholder value for us versus really saying, hey, we got to hit a target leverage number and really to create long-term shareholder value, that’s really what – that’s really how I think we, as a leadership team, will always remain focused on.

[David Katz:]

Got it. Thank you very much.

[Operator:]

Your next question is from the line of Joe Stauff with Susquehanna.

[Joe Stauff:]

Good morning, everyone. I had a couple of questions regarding your online statement is good. I guess, the three main questions that I had, is largely just looking at the growth in uniques that you have, the quarter was strong for online. Certainly, there seems to be an expectation, right, that’s going to continue, but you posted 11% unique growth in the quarter and that’s you’ve been able to grow that business in terms of unique double digits now for a number of years. And I’m wondering the type of customer that you’re acquiring is that whatever you can share with us on that. So that’s number one.Number two is, if you can kind of talk about the competitive landscape, it seems to be a two-horse race between you and TVG. TVG now is kind of ramping their product offering with FanDuel and what you think that means. And then finally, how you use this asset TwinSpires, right, given the scale that you have there? And what product development plans you have to be able to use this asset to amplify a better America?

[Bill Carstanjen:]

Thanks. That’s a great group of questions. I would say first of all, the TwinSpires growth rate in the first quarter. If you look at, kind of the first 11 weeks is completely different than the last two weeks of the quarter. The last two weeks of the quarter kind of post, call it March 16 saw a significant increase in handle. So, the first quarter number really isn’t reflective of what we’re experiencing in TwinSpires today as all the OTBs and tracks are racing live hour or dark for that matter, where customers would go to wager on horse racing that really has forced an acceleration of that transition of customers going to bricks-and-mortar locations to conducting their business online. And I think that people that have been resistant to transferring and going to online channels have probably learned about it and had a good experiences, and will probably stay there to be quite honest post this crisis.So, I think this is the only one of those industries that has a permanent change in how the industry goes to market. In terms of, I can’t say that we’ve done any that I’ve seen any analytics over the last couple of weeks that says, what is our customer – what do our customers look like? But anecdotally, I can say that we’ve picked up a lot of core horse players, but we’ve also picked up a lot of other players now that are playing thoroughbred racing, because all of the sports events – sporting events that have been canceled across the world and there’s nothing else to have fun with and go wager on. So, we picked up a whole bunch of new ones, new customers and, I don’t have that data, but my gut says that it’s all over the board.In terms of the competitive landscape with the TwinSpires and TVG, we keep an eye on that. Obviously, we have – there is a barrier to entry and horse racing that doesn’t exist maybe, with sports. And that barrier to entry is you have, under the federal law, you have to have the consent of the horsemen and the racetrack that is conducting the race in order to take wagers on it. So that’s a pretty big barrier to entry and that barrier to entry doesn’t exist if you have a gaming license in some of these states. It still exists with respect to horse racing. But if you have a sports wagering license in New Jersey or Pennsylvania or Indiana, you can’t take wagers on horse racing, even if you have sports wagering without the consent of those horsemen and it has to be in a pari-mutuel format unless otherwise consented to.So, I think it’s a – and I think that kind of falls and it falls into both of your questions with respect to FanDuel. They would have to go get consented people to be able to do that. But it also falls into, I don’t want to go too deep into strategy, but certainly, having assets like the Kentucky Derby, if you can go wager on the Derby on the same app as you can wager on the Lakers or the Louisville Cardinals or New York Knicks, then that’s another offering that other people may not be able to offer. So, I think it puts us in a good position once we get all the technology situated and sorted out and we’ve got a great team that knows how to market to customers and acquire them at the right price. So hopefully, that answers your question.

[Joe Stauff:]

Yes, it does. And just one clarification, I guess, over time or maybe, when it’s reasonable to have a single wallet sort of offering within TwinSpires and then Bet America, look, I know it’s probably, naturally, very sensitive in terms of competitive and so forth, but I know there’s a technology obstacle as well. And I’m wondering like how long or when that could conceivably get there. Is it a – is it two years or is it a year in those ballpark terms, because I realize it’s a little sensitive.

[Bill Carstanjen:]

Yes, no problem. Technology takes time, and I think it’s all of matter of prioritization. So, when you have technology teams and scrum teams that are doing different aspects of the platform you’re building, you’ve got to say, do I want to have a single app, where somebody in New Jersey, Pennsylvania, Indiana, as they go through States, can they sign onto one app and get into the system? And that’s something I think a lot of online sports wagering companies are struggling with. And even going live in States, where I’d rather go, I live in the state, there’s my priority to get pari-mutuel wagering on the same platform, so that it comes down to prioritization and a lot of cases, I think we made it the main priority. We could do it a lot faster, but I think a year is kind of a good benchmark and I might be off by six months on either side, but – and that all depends, if 10 more States go live, then we’ll probably focus on going live in those States over this with the priority. But I would think a year is probably a fair way to think about it.

[Joe Stauff:]

Makes sense. Thanks very much.

[Operator:]

And at this time, there are no further questions.

[Nick Zangari:]

Well, thanks everybody. We appreciate your interest in our company and your continued investment with us. We promise to do our absolute best to generate returns for you and do the right thing to grow our business in the mid-term and the long-term. So, thanks very much. We look forward to talking to you next time and be well. Stay safe out there. Thank you.

[Operator:]

Thank you. This does conclude today’s meeting. You may now disconnect.