PENN Entertainment, Inc.
Q2 2020 Earnings Call Transcript

Published: 6 Aug 2020

[Operator:]

Greetings and welcome to the Penn National Gaming Second Quarter 2020 Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder, this conference is being recorded Thursday, August 06, 2020. I'd now like to turn the conference over to Joe Jaffoni, Investor Relations. Please go ahead.

[Joe Jaffoni:]

Thank you, Kelly. Good morning, everyone and thank you for joining Penn National Gaming's 2020 second quarter conference call. We'll get to management's presentation and comments momentarily as well as your questions-and-answers, but first I'll review the Safe Harbor disclosure.

[Jay Snowden:]

Thanks, Joe. Good morning, everyone and thank you for joining us for our second quarter earnings call. We hope you and your families are remaining healthy and safe. As you'll see from the strong results we released this morning, we've deftly come a long way since our last earnings call when all our properties were shut down. But these continue to be uncertain times for all of us and our heartfelt thanks go out to all the healthcare workers, first responders who are still out there on the front lines battling this pandemic every day. Here to present with me this morning is our Chief Financial Officer, Dave Williams who as you know joined us on March 03 from Apple and has been on this rollercoaster ride with us every since. I am also joined this morning by other members of our senior executive team who are here and available to help answer your questions.

[Dave Williams:]

Thanks Jay and good morning, everyone. While our properties were closed in April and the beginning of May, we took decisive actions to solidify our liquidity position, materially reduce costs and reimagine how our properties could operate. When we began reopening our properties in May, we opened with a more efficient and profitable operating model both at our properties and at corporate. While May and June results may have benefited in part from pent-up demand, we continue to be highly encouraged by revenue and EBITDA trends in July and August despite the continuation of safety protocols including capacity restrictions and social distancing mandates. During their respective reopening periods through June 30, our properties are cumulative 1,300 basis points EBITDAR margin expansion and a 33% growth in adjusted EBITDAR compared to the prior year. These results were driven by stronger than expected revenues, coupled with an aggressive reduction in operating expenses across the company. I'm extremely impressed by our highly talented operating teams who are delivering exceptional performance during these challenging times. Although all the two of our casinos are now open, we will continue to be disciplined in our capital expenditures. We spent $14.5 million on maintenance CapEx in Q2 and approximately $16 million on project CapEx related to Morgantown and York. We anticipate resuming construction at both Morgantown and York later this year with a projected opening day for both in the second half of 2021. This quarter we issued $330.5 million of convertible debt and an additional $345 million in an equity raise, which significantly improved our balance sheet and provided additional liquidity. Since reopening, I am pleased to report that each of our properties has generated positive EBITDAR and as of early June, the company as a whole began generating positive free cash flow and continues to grow cash balances as a result of our operations. Our ending Q2 cash balance was approximately $1.2 billion with a net debt balance of $2.0 billion. This improved liquidity provides well over 12 months of operating cash in a very unlikely event of another full company closure and zero revenue environment. We're also confident that our improved balance sheet provides ample liquidity to support the launch of our interactive products over the coming months. With that I turn it back over to Jay.

[Jay Snowden:]

Thanks Dave. The outstanding results today at our reopened properties highlight our unique strategic position as a best-in-class operator of market-leading regional properties, which have rebounded more quickly than casinos in destination markets. Although visitation has yet to return to pre-COVID levels, in large part due to state mandated capacity restrictions and limited amenities, spend per visit has been notably strong up 45%, resulting in better than expected revenues and importantly, we've seen a significant increase in unrated play and growth from a younger demographic. This coincides well our efforts to implement cashless and contactless initiatives and other technology enhancements at our properties as soon as possible.

[Operator:]

Our first question comes from Joe Greff with JPMorgan. You may proceed with your question.

[Joe Greff:]

And nice results to you all. Jay, you mentioned in the press release earlier that so for July and August results were encouraging. I was hoping maybe you can break that out in two pieces for and maybe in relation to how you described the reopened properties in June performance. So the properties that reopened in June let's call them a phase 1 property, the revenues were down 6%, EBITDA up 33% in that period in June. How did they perform relatively to those metrics in July and then for those properties that opened up in July for their respective periods, let's call them the phase 2 properties, how did they perform relative to that EBITDA and revenue performance that you reference in June?

[Joe Jaffoni:]

So Joe and the numbers that we quoted in the release are really those are May and June combined. So there are some properties in Mississippi Louisiana that opened in May. So that's the period of time they were open whether it was May June or just June year-over-year for that quarter. Here I would say to you to answer your question is that we continue to be encouraged and I've been really blown away at just how stable the ongoing operating performance has been across the portfolio with very few exceptions. 4th of July weekend was a little light and I think that probably was just due to a fear of being in big crowds and so when you look at 4th of July as typically a busy, busy weekend for us and this year it did not match up well to last year, but as soon as 4th of July weekend was over, we were right back for the rest of July and so far in August looking very much like what we saw in the month of May and June. The numbers aren’t going to match up perfectly because you have properties that opened in June and then that opened in July and the gaming tax rates are different and the competitive set is different and so it's not to be exactly what you saw for may and June, but it's a lot closer to what you saw in May and June and we put in our release then maybe what others had in mind that there was going to be the significant drop off after the first week of the first two weeks. Our properties honestly that have been opened the longes which is Mississippi and Louisiana are still producing some of the strongest result in the portfolio on a year-over-year basis.

[Joe Greff:]

Helpful and do you actually opening or reopened the Tropicana and maybe Dave you can help us with the monthly cash burn and the Trop and the part all that corporate and that will do it for me, thanks.

[Joe Jaffoni:]

Yeah so we plan Joe right now to open the Tropicana property in September. There's a lot of moving parts. Every day we're learning and our team on the ground there is continuing to do competitive assessments in terms of ADR and RevPAR occupancy and so we're going to be really thoughtful around when and how we reopen. As of right now September feels right, but we have several more weeks to nail down an exact date and if it's not right then we'll wait a little bit longer to reopen until it is right. These are fluid times. Everything is dynamic and I'm not sure Dave if we have the exact cash burn for Trop and Zia Park, but feel free to jump in there.

[Jay Snowden:]

Yeah Jay and thanks Joe, we don't really give specific property answers. So what I will tell you is that even with those property closed as a company, we're cash flow positive.

[Operator:]

Our next question comes from Felicia Hendrix with Barclays. You may proceed with your question.

[Felicia Hendrix:]

Dave, I'll start with you. If you just look at the OpEx per day in your various segments is there any significant difference? Is there any way we should look at it differently or can we just use a similar metric across the board and if you could just talk about that up and running. I know you gave us the 200 basis point approve it, so we could kind of back into it, but if you can add anything to that, would be great. Thanks.

[Dave Williams:]

Hey Felicia I am going to grab that one because I figure this question will come up and it has on previous calls of our competitors and I think we've given you guys everything you need when we say that one, we've given you the results for May, June, which I think is helpful and then I think more importantly as you look in it how to model this as you move forward, I said in my prepared remarks that we believe we can get to 100% of pre-COVID level or call it 2019 level EBITDAR on 90% or approximately 90% of pre-COVID level or 2019 revenue. So I think that's going to give you everything that you need to back into an OpEx per day or whatever you need for modeling purposes.

[Felicia Hendrix:]

And then Jay on a lot of these calls, everyone has been asking with the performance you're seeing it sustainable and I think you’ve talked about that and everybody has talked about that. So I just have a bit of a different question and that is as you mentioned May and June were what they were and other than July 04, things were kind of continuing but what does it take to see an increase in this environment or should we just expect this stability for now and I know it's August 06, but have you seen any change at all since the unemployment insurance benefits have essentially ended until Congress can pass a new program?

[Jay Snowden:]

It's a great question and I don't know that any of us truly know the answer Felicia in terms of what needs to happen for this to get better, what needs to happen for the trends to change to the downside and what happens if the stimulus checks stop or reduced from where they've been over the last several months and we don't know the answer either. I think there's a lot of factors in play here that the unemployment benefits are a tailwind. I think we're also obviously benefiting because one of things that we're seeing Felicia is that our unrated business is up almost 15% year-over-year on a large base of business. So there's a lot of new customers coming in and when we look at the rated database we have and you look between 21 years and 45 years old, that also where we're seeing very strong growth of 25% year-over-year. So there is a lot of new people coming into our facilities. We're obviously very active in getting a card in their hand and we feel like there's an opportunity for us as we move forward to convert those guests into long-term loyal customer and we're taken advantage of the time where there are really are more limited entertainment options. Movie theaters aren't open and sporting events are with no crowd and there's no concerts and so you're looking -- people are looking for things to do and I think that's part of why the spend per visit and time per visit has been so strong as people get out of the house and they're in a safe environment and they can do something fun. They're to spending more time and more money doing that. We've actually seen our oldest segments of the database over 55 years old are the softest in our database and so I think to the extent and I figure a question like this will come up where what happens at the time that there is a vaccine? What happens when there is effective treatments and those -- and when sporting events start allowing fans again and concert get going, do you lose those customers that today are showing up at unrated or there is growth in your younger segments and I think we keep a lot. I think what we're hearing solicited, unsolicited is that many of these folks have never been to a casino or when they went to casinos,, it was always jump on an airplane go to Vegas, now they're staying closer to home and they realize these are really high quality experiences even in this current environment. It's a really fun experience and they're spending time with us and even if we lose some of that business down the road, I think you’ve to look at that's probably around the same time that people who are older and that were seeing declines in today are probably going to feel more comfortable coming back to casinos and leaving their home and spending more time with us. So there is a lot of variables there. I don't know which one do to point to and extrapolate what that means if discipline get better, that one gets worse. I would just reiterate what I said earlier that I've been really pleasantly surprised that we've seen such stability, this is not just the first day or the first week, it's month two and now it's into month three for some of our properties like I said Mississippi Louisiana and we don't have any reason to believe that that's going to fall off anytime in the near future because it's been sustained now even through early August.

[Felicia Hendrix:]

And Jay with these younger visitors that you're converting to mychoice that are playing in their hands how does that tie to your expectations that you put out in that omnichannel presentation in May when you're talking about the barstool act and your goal to convert $5 million of the ,or I guess 5% of the Barstool audience and then 5 million of your active mychoice members which that announced about 25%. So that seems a little kind of not optimistic but maybe not super easy right. So now that you’ve kind of the younger folks coming in, does that make you feel better about those objectives?

[Jay Snowden:]

Well, I always felt good. So I guess they just reinforces how I felt and here is a lot of say about that Felicia. The mychoice program and Todd George on our team, Jennifer Weissman our Chief Marketing Officer, Erika Nardini at Barstool, were talking regularly about the evolution of mychoice and mychoice we believe is going to be its post now but we believe that's going to be the strongest loyalty program in the space because it's going to be the only program that is wholly owned by the operator and we deploy on wholly-owned channel of business. It's going to be deployed in all our brick-and-mortar casinos, Greektown we're going to live in October. So then we'll be 41 out of 41. Mychoice is already connected to our social gaming product, it's already connected to our online casino real money wagering in Pennsylvania and by the end of this calendar year, we're going to have it also part of our Barstool Sportsbook app. It won't be at launch, but it will be before the end of this calendar year. So as you think about how that program evolves, it's not going to be maybe as most loyalty programs in the casino space have been for many, many decades where it gets you freebies, the free buffet or its cash back at the machine and I think you're going to see the offering and the experiences that we're allowing people to use their earn points to redeem are going to be tied in very well. We love the Mychoice because it really is whatever you want, you can get and there's going to be Barstool merchandise and opportunities to go special events with Barstool personalities and so this younger demographic that we're seeing sign up for cards and we're seeing growth in their rated play right now and that's really without the Barstool connection in place and as it relates to the Mychoice program. So were very bullish on omnichannel. We're very bullish on our loyalty program and how barstool fits into that overall strategy and there is one point that I would make that I think is very compelling with regard to why we're such big believers in omnichannel and it is with regard to regard with what we're seeing in Pennsylvania over the last several months. So during the time that our properties were closed in Pennsylvania as you know, we have a real money iCasino product called Hollywoodcasino.com or you can download the app of course and there were approximately 20,000 customers during the time that our properties were closed between late March and late June, early July, 20,000 customers that engaged with us on Hollywood Casino products, Real Money and in Pennsylvania and if you look at what happened to our database in Pennsylvania post reopening of the properties about a month ago, what you'll see is that the customers that have only ever gone to the casino. So they've never engaged with our online. They're just pure brick-and-mortar casinos goers. Their place since we reopened is down about 20%, which as I understand from what the regulators said yesterday that sound like about what is going to be for the whole state. I think the slots were down 20% approximately. If you look at the customer, the 20,000 that were engaged with us online, their combined play between going back to the brick-and-mortar casinos and their continued play on Hollywoodcasino.com and on our app is up over 40% year-over-year right. So you just think about the power of on omnichannel. We've been talking about this for a lot time. We finally get to start proving this out. We're highly encouraged by what we're seeing so far and all of that is without Barstool in the mix yet, which we're planning to launch that app next month and we think those trends are only going to prove out to be better.

[Operator:]

Our next question comes from Thomas Allen with Morgan Stanley. You may proceed with your question.

[Thomas Allen:]

Thank you and congrats on a strong execution in the quarter. Just a few questions on the Barstool Sportsbook app, as you get close to launch, can you just talk about some of the things you're most excited about. Also what's holding you back from launching? I think there was some hope it was going to launch in August and obviously the NFL season opens September 10 hopefully. What's stopping you from coming at it earlier, thanks?

[Jay Snowden:]

Well, let me start with the second part first Thomas. What's important to us is getting this right. I would tell you that the beta of the app is in my hands and my executive team's hand and the executive Barstool hands right now. I was on it way too late last night and enjoying myself at the fantastic product. So what we want to make sure that we launch this and that you get one chance to make a first impression. So what's more important rushing it to get to some MLB and NBA games in August or doing this right lunching it in September when we know it's going to deliver a great experience UI, UX for the end-user, that's when we're in this for the long game. So the difference between August and September would have been nice to be open now or be live now because there's some pent-up demand for sure and by the way, we're seeing great pent-up demand in our retail sportsbooks last week and our sports betting handle was up 60% year-over-year for the two days over the weekend. So that demand is going to be there and if we missed a few games in August, but we're ready for football season in September while MLB is still going knocking on wood of course. NBA playoffs this is a heck of a time to be launching your app because we're launching. Others have had theirs launched and I we're very bullish about how our app is going to compare to the top apps in the marketplace and what are we most excited about? Look we're cited that we've taken our time to launch because we're to launch a very competitive product with things like traveling wallet. I think our bet flip experience is second to none, the intuitiveness of how to use the app and importantly the exclusive betting options is really the differentiation that we're going to I think be able to deliver, it's going to get better over time, but even day one and I am not going to get too much detail here because we're yet to see it when we launch it. You're going to see a lot of opportunities to engage with Dave Portnoy and Big Cat and Brandon Walker and Marty Mush and many others at Barstool if you want bet with them or you want to bet against them, if you want to save their bets. These are things we're going to be able to do day one and I think you should imagine that the content and the branding integration into our app with Barstool is just going to get better and better and better every time we do a version release and we think that we'll be to do a new version release probably every six weeks after we launch and so I'm excited about everything. There is really -- we're not launching and holding our breath like wow, we wish we would've done this by the time we launched. We could have launched this app in Q1 or Q2, but it would've been a competitive product. We're confident it's going to be very competitive when we launch next month.

[Thomas Allen:]

Thanks. I think we're all excited and if you need some more tests for beta move over. Just some follow-up just on the iCasino customers you are seeing, can you just talk a little bit about what they're playing and any other thoughts or recent thought on the cross-sell opportunity between iCasino and Sportsbook customers? Thank you.

[Jay Snowden:]

Yeah. Well, it's a great question and we've been surprised honestly because the iCasino customer skew is younger than our brick-and-mortar customer. Brick-and-mortar customers more that 55 average age range and we're seeing for online casinos is closer to 45. We've been surprised that the percentage of play on slots versus tables has been pretty similar to our brick-and-mortar casinos. We thought it would skew a lot more table game centric and we haven't seen that yet. So we're encouraged about app because I think there's some newer slot products that obviously is not just targeting customers over 55, but there is Gen Xers that are engaging with these slot product as well and look this is something the second part of your question is this is our strategy right. We think that if you're excited about the spec IPOs of drafting for example, which is a pure sports betting online play, we bring omnichannel to the table which we feel really good about for the reasons I mentioned earlier and then recently there has been a couple of spec IPOs, which are much more focused on online casino that being Golden Nugget and Rush Street. The beauty of pent strategy in our partnership and ownership structure with Barstool is that you really get the best of all of that. We have a very compelling sports brand to lead with. We have a database and access to 66 million sports enthusiasts over 60% of which we know bet on sports and over 40% are avid sports betters, those that are significant Barstool loyalist today. And so you think about our ability like DraftKings and Sando have successfully done in New Jersey to convert those sports betters to online casino products, it works, and we've seen it work in New Jersey, we've seen it work in Pennsylvania. We only today in Pennsylvania have online casino and we are running North of 10% market share just because of our marketing approach with our database of getting an activist to engage with us and some of our active customers, new customers that are friending their friends on Facebook and introducing them to our products. So if you're at 10% with casino only, what does that look like when you think about the launch of Barstool Sports Betting app and our ability to convert those customers in that case more table game customers to our online casino products. And that's why we decided to launch in Pennsylvania first because it's sport and iCasino and we're very focused on Michigan because that's sport and iCasino in Michigan is ready. We think that will be probably sometime in Q4 and New Jersey sports and iCasino is going to be very high on our list because we think that we really have the ability to do a great job of converting not just brick-and-mortar to online and online to brick-and-mortar, but online sports to online casino in some cases online casino to online sports and we've a great product that again I'll say this a million times are wholly owned by Penn. That's a real differentiator when you're talking about Penn's strategy with Barstool.

[Operator:]

Our next question comes from Steve Wieczynski with Stifel. You may proceed with your question.

[Steve Wieczynski:]

Jay you talked about how that revenue base now needs to be at 90% of 2019 levels. Obviously that's down from 95%. So I guess the question is where did that number go and what levers do you still have to pull to drive that number lower, if you can get it lower and I understand it's not going to get let's say into the 60s given the rental payments, but is that a number that could eventually get into the mid-80s as time goes on?

[Jay Snowden:]

Well, let's see Steve. Let's see how this plays out. Tod and I talk about this daily and we wouldn’t put 90% out there if we weren’t comparable with 90%. So let's sort of leave it at that. And there are a lot of it - there's a lot of variables right it depend on - how great can margin be what depends what you're sustained revenue levels look like. We have a good sense as to what our cost structure is going to be as we move forward. And I look at our major competitors and regional gaming and I think that listening to their earnings calls and what they're saying publicly - there is a big focus on margin improvement and really taking this opportunity to create structural change. And so we imagine what the industry has always done. Those orthodoxies of - you have to have a buffet and you have to comp the buffet. It’s open every day for three meals and promotional credits, you have to do this and you have to reinvest at these percentages. I think, we whiteboard everything I think our competitors are - going through a similar exercise. And so, it's not to say that in a particular market where we compete against privately owned operator if they do something different we may have to think about what we do there. But as you think broadly across, our costs are portfolio of properties most of these changes that we've made with very few exceptions. We believe we can carry forward into the future and not look back. And we’re encouraged by that that’s obviously how we think about vendor relationship and what we've learned will my properties will shut down and how we can enhance those vendor relationship. How we think about marketing and acquisition costs. How we think about advertising spend, promotional spend. And of course how we staff our businesses and we’re really excited. We’re actually having for the first time ever great conversations with regulators in a number of states about cardless, contact list and cashless technology that we've been looking at for years it’s been deployed in pretty much every other industry by gaming. And it’s now - it’s a customer expectation particularly with the younger customers that were seeing come in as unrated and are already rated and helping us see that great growth between 21 and 45 years old. There's an expectation that you don't have to go to an ATM punch a bunch of numbers that you might not want to be touching to get cash out, pay a fee to get your own cash out, go to the table and transact out the text. It just not how you know Gen-Xers, millennial, Gen-V it is very foreign adding regulators get that. And the conversations we've had to-date have been really productive. And I was just reading yesterday that the new casino in Downtown Las Vegas is already launching or circa. They are going to be launching with cashless table game, fantastic I think that what you’re going to see this industry head. And I think it will be market-by-market and jurisdiction-by-jurisdiction. We obviously I've mentioned before also, we still spent almost $20 million a year in direct mail. I don't think anybody's special last three months is waiting for the mailman to show up No disrespected before they decide what to do today. And that was the case 10 years ago and 15 years ago. And that the idea that, we can get offers to our consumer or to the end-user faster more efficiently in a way that they want packaged up and delivered. And that the way to incentivize going forward where there is a lot of efficiency there and there is an enhanced consumer experiences well. And so is there more of course there is more. If I were to articulate today which I won't where we’re at in terms of revenue generation and EBITDA generation as of yesterday from the kind of poppies we opened obviously 90% still looks conservative, but there's a lot of moving parts. And so 90% the number we feel comfortable with today and that's something that will continue to update all of you as we move forward.

[Steve Wieczynski:]

Got you, thanks. And specifically with marketing and advertising obviously those remains in a very depressed right now in terms of your spend levels. But I wonder how you guys think about turning that back on when do you actually make that decision to start getting more aggressive on those fronts? And then that brings the next question of do you fear that all of sudden certain markets start to get overly promotional?

[Jay Snowden:]

Steve again - as we say here today based on how we’re thinking about the business and what I'm hearing generally in this space I just don't see that happening. I'm not going say ever, but do I see that happening in the next year or two years. I don't and what I think that even in terms of advertising promotional spend a lot of that was done in paid media, TV, and radio - there is more efficient ways to do business. And we’re much more focused on sort of surgical digital opportunities that were eyeballs are that's where we want to be. And honestly Barstool is really helped us think differently about that. And there are sports and digital media company they know, they understand digital advertising, as well as any company on the planet. And so, , we're thinking about things differently, not just for our brick and mortar, but of course, the launch of our sports betting app, and our online casino apps and products. So yes, I think this is a - it really is a true reimagining. I think this is a once in a career opportunity for companies to really challenge and question everything they've historically done and figure out what's the best model going forward. And we're certainly doing that at Penn.

[Steve Wieczynski:]

Got you, thanks, Jay appreciate it.

[Jay Snowden:]

Thanks, Steve.

[Operator:]

Our next question comes from Shaun Kelley with Bank of America. You may proceed with your question.

[Shaun Kelley:]

Thanks, everyone and Jay, I totally going to be dead horse here. So, please keep this answer maybe shorter. But, just I'm going to ask the same question that I think Steve just asked, but slightly differently. So if we look at the 90% number that you gave, I think the way we back into it, that sort of implies, 300/350 basis points of sort of margin improvement on those 2019 levels. So, the question I want to ask is like, if we're seeing 1,300 basis points - granted some just a select number of properties there reopen today, yet we're sort of thinking that 300 or 400 might be sustainable. What's the difference? Is it primarily, it marketing dollars because, we haven't relayered in any of those promotions, and some of those will naturally come back or is it? Operating expenses, because, visitation levels are lower, we're just getting this much, much higher productivity that you don't think is sustainable or is it something else just kind of specifically what's the difference in the - because that's still seems like it's a pretty wide margin of differential if we think about it the way we laid it out?

[Jay Snowden:]

Yes, it is Shawn and I think your math is right. I would say there's really, there's two things that I think about why we’re going to stick with 90 today, and we'll update you as we move forward. Is that one, its early, it's been in some cases one month, in some cases two months and the best case, it's been three months in the case of Mississippi, and Louisiana. So that, it's early I don't want us to get over our skis and make promises that we can't keep. So we felt like we could we could make a commitment today to 90% and we'll see where it goes. And then number two, you're seeing spend per visit up 45%. So I think that's going to last forever. I don't I think you're probably going to see a higher spend per visit as we move forward for a lot of reasons that we've talked about today, but is it going to be 45% I don't know. That would be great if it is. And you're going to eventually see more volumes of customers come back. I think you're going to see visitation levels at some point, whether it's when there's a vaccine or effective treatments or whatever those variables are, you're going to see visitation continue to grow. And when there's more bodies in the building, naturally, your cost structure is going to creep up a little bit. So those are the primary reasons I wouldn't get hung up on, why only this and could it be that. Let's see how things play out, where we were from May and June. We've said July and August have looked a lot like May and June, with the exception of the 4th of July weekend. And we'll keep you posted as we move forward.

[Shaun Kelley:]

Great, that's perfect. And then the follow-up question I have is, obviously you've talked a lot as we think about Barstool. You talked a lot about the 66 million uniques. There was, some commentary about just continued I think strong engagement on some of the podcasting efforts in the press release. I know that or I think that that 66 million numbers is fairly dated. Any chance we could get an update on what that looks like today or any other color, softer color you can provide if we can't get the hard data?

[Jay Snowden:]

Well, it’s a great question that's the number we've been using we're going to continue to use. I think we all know that Barstool brand has grown since the time that we started using that number as a Nielsen number and it changes daily. It depends on what they have going on a particular day or a particular month. So I wouldn't change that number as we sit here today. What I can share and I think these stats are pretty amazing as you look at the social platforms for Barstool. This is for the month of June of this year. Instagram followers up 49% year-over-year to 46 million followers, Twitter up 49% to 23 million followers, TikTok they didn't even they weren't engaged with last year because TikTok was just launching 16 million followers on TikTok in the month of June for Barstool. Podcasts at 40% to 9 million, Snapchat up 37%. So this is a brand that we knew was great from a from a partnership standpoint from a loyalty of fan standpoint. And who would have known Dave Portnoy would be interviewing the President of the United States and Dave Day Trader and the brand has just gotten bigger and big cats playing video games with hundreds of thousands of people watching during COVID quarantine. They're so creative and they're just maniacal about entertainment, and trying to make sure that they bring some level of levity. Not everyone loves it, but they do bring levity, and it's irreverent. And it's satirical oftentimes, but they are really talented and I think they have done an amazing job during a time when there were no sports of growing their brand in significant ways. So, I would tell you and sort of where your question was leading. The number is obviously bigger than when it was we first started using that number. I just don't have anything official in front of me to share with you on what it is today.

[Shaun Kelley:]

It's great. Thank you very much.

[Jay Snowden:]

Thanks, Shawn.

[Operator:]

Our next question comes from Barry Jonas with Twist Securities. You may proceed with your question.

[Barry Jonas:]

Great, thanks. Just to start with a follow-up on margins. Really strong margin expansion, just curious - what the ranges by properties is it wide are there any call outs, whether it's geography, property type any other characteristics that vary, as you think about that margin expansion?

[Dave Williams:]

Yes Barry, I would say there's some outliers to the good and to the bad, but what we're sharing with you is within a very tight range for the vast majority of our properties. And there's competitive reasons why some might be higher and some might be lower. But if you were to look across the portfolio I think you would see that 50% to 65% of them are within a very tight range within very close to what we shared today on the - revenues down 6 and EBITDA are up 33 and margins up 1,300 that's not. It's not being driven by one or two properties, it's really being driven by the bulk of the portfolio.

[Barry Jonas:]

Fantastic, and then just on the cashless contactless initiatives, what are your expectations longer term about medium and longer term about adoption by players? Do you think that it is really additive or more a substitute for cash?

[Jay Snowden:]

Well I think it's, well there's a lot of ways to answer that. There are very few places that you go to today in your life grocery stores, forms of entertainment, bars, restaurants, where people are transacting in cash. And when I say people, that's not 21 year old, that's not 44 year old, that's not 58 year old, that’s not 72 year old, it’s everybody. Everybody has debit cards and credit cards and I think it's just an expectation. So this is something that we have to do as an industry, or else it's going to hurt our opportunity to engage with younger customers and to keep our existing customers. The days of going to ATM and getting cash out to buy in a blackjack table, I love playing blackjack but doing it for my adult life. I'll say over 21 but no one enjoys going to an ATM and doing that. So I think that this is something customers are asking for. It's something that regulators are very open to and I think certainly seeing the light now more than ever because they're hearing from customers to I don't want to deal with cash. And we spend millions and millions and millions and millions of dollars across the company, moving cash, tracking cash, sending cash, collecting cash, storing cash every day. And you can imagine the sort of efficiencies that it creates, while at the same time making it better guest experience. We can't move fast enough on this as an industry.

[Barry Jonas:]

Great, thank you.

[Jay Snowden:]

Thanks, Barry.

[Operator:]

And our next question comes from Chad Beynon with Macquarie. You may proceed with your question.

[Chad Beynon:]

Hi, good morning. Thanks for taking my question. Wanted to go back to sports and eye gaming. Jay, I know in the past you've talked about potential goals about more vertical integration around the tech stack. And I know it's early in your resources with Kambi and White Hat on your onboarding side. I think I've been pretty successful, but I know you're building out your staff in-house with engineers. Are there places in the tech stack where you might find, more vertically integrated opportunities, whether it's on the casino or content side with slots or blackjack or anything else on the sports side to come? Thanks.

[Jay Snowden:]

Yes great question, Chad. And look, our focus right now, as you can imagine, is let's launch this app in Pennsylvania next month, as successfully as possible. And we feel like we have the right technology partners in Kambi and White Hat. We feel like we have a fantastic team of engineers and product developers and operators, our customer service folks that are going to support the launch and the further development of that app. And so, that's really the focus right now are there opportunities down the road to think about, vertical, more vertically integrating technology, absolutely. We have those conversations, but it's not something that we're focused on imminently. We've been, our approach on this, Chad has been and again, why we took as long as we did to launch the app is that one, we didn't want an off the shelf product that wasn't going to be competitive. We want to take the time to make sure we have proprietary features and functionality and content integration with Barstool that differentiated our products. And we want to own any aspects of what touches the end user. And that's what we're doing today. Now, does it make sense to go even more vertically on sort of back end and risk management trading services? Maybe, maybe not, maybe that's an area that we say others can just do it better than we can. And so, we'd rather not expend energy and resources on that. But we feel we feel good about the strategy and the tech stack today. I think more to come in future quarters in terms of how that thinking evolves.

[Chad Beynon:]

Okay, thank you. And then on the land base side, do you have a best estimate in terms of what percentage of units have been active since your properties have reopened and do you believe you have the right amount of product, too much too little? How does this kind of fold into, how the casino floor on the land base side will look from a product standpoint, post pandemic? Thanks.

[Jay Snowden:]

Well, I think I've said this a couple of times in past calls that, this 50% of capacity limitation really only becomes an issue for us on the busiest of hours on weekends or a busy holiday weekend, like 4th of July, certainly it was a factor. But if you look at sort of day in, day out, it's a non-issue on weekdays, across the company. And it's really a non-issue on most of the weekend, other than those peak hours of seven to 10 p.m. on Friday and Saturday night. So, the way we're thinking about it is love our properties, they were built decades ago and they were built within a very different competitive environment. There was a lot less supply in state and neighboring states. So our casino floors are plenty big to handle the busiest of days, the busiest of hours on New Year's Eve and then some. And so, our ability to continue to take product off the floor, let's say even if we had the ability to reopen a 100% of our floors, I think you'd find that our focus is going to be on comfort and safety. And maybe you don't end up reopening 100% of your game. You open up 100% of your floors, but you space everything out and social distancing or a more socially distanced approach and experiences what we create, Todd and our GMs and our Regionals’ are working on that every day. We've done that somewhat so far. There's a lot more opportunity to enhance the experience for people, once we don't have those limitations or they've been relaxed more than they are today.

[Chad Beynon:]

Thank you very much. Appreciate it.

[Jay Snowden:]

Thanks, Chad.

[Operator:]

Mr. Snowden. I'll turn the call back over to you for any final remarks.

[Jay Snowden:]

No final remarks here. I think why don't we take one more question? I think we're a few minutes before the hour. And let's just do one more. If we have someone.

[Operator:]

No problem, of course, no problem. Our next question comes from John DeCree with Union Gaming Group. You may proceed with your question.

[John DeCree:]

Good morning, everyone. Jay thanks for taking the final question. I think you've covered pretty much and also ground so forgive me if it's still little bit more granular. But you had spoken earlier about the database engagement in Pennsylvania on the Hollywood real money product. I was wondering if you could give us a little context? I think you mentioned maybe 20,000 or so customers have played online curious half or large portion of the customers you've seen come through the Hollywood casino since launch I know it's only been a short time. But I'm curious how that stacked up to your expectations and the overall mix of either users or revenue coming from the database so far?

[Jay Snowden:]

Yes, no it's a great question, John. And it's still early innings, obviously right. So we're learning and analyzing the data as we go, here's the way to think about it. I might be a little bit off on these percentages, but roughly one-third of the guests of that 20,000 are database customers that were inactive or dormant. Roughly one-third, were database customers that were active with us at our brick and mortar casinos and roughly one-third that engaged with us that 20,000 over the quarantine period, only online were new customers. And we're obviously getting cards in their hands as we go. So we've been I would say pleasantly surprised given that our paid media behind Hollywood Casino online and PA is virtually nothing. We've really focused on activating our database activating at the properties to enhance the exposure of Hollywood Casino online. And so the fact that two-thirds of our engaged users are were either dormant or new to the company is really I think encouraging. And the one-third customers that were engaged with us actively at the casinos and are now engaged with us also online. We're seeing their total spend with Penn significantly higher than it was when it was only spent at the brick and mortar. So they are year-over-year spend, much like I shared in the stats that I mentioned earlier, is a lot higher when you combine their online revenue as well as the brick and mortar revenue and spend. So yes, I would say we're encouraged. I mean, it's early it's one state, it's just online casino. We haven't launched Barstool yet. And what does it look like when you start cross-selling your sports bettors to online casino. We'll learn a lot more. I think your questions a good one and we have limited to share, but we'll share more on future calls.

[John DeCree:]

I appreciate all the additional color guys. I think you answered my follow-up on marketing. So I'll leave it at that. Thanks again and congratulations on all the work you've done so far.

[Jay Snowden:]

Great, John, thank you for your question. And that's it for our call. Thank you for dialing in. I know it's challenging time. We're like everyone else is a company figuring out how to navigate this as we go. I could not be more proud of how the company has stepped up from top to bottom, everybody in the company, no complaints. What can I do to help us move forward and couldn't be more proud to be leading this company. So thank you for dialing in and we look forward to speaking with you next quarter.

[Operator:]

That does conclude the conference call for today. We thank you for your participation and we ask that you please disconnect your lines.