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Eldorado Resorts Inc  (NASDAQ:ERI)
Q3 2018 Earnings Conference Call
Nov. 08, 2018, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, everyone, and welcome to the Eldorado Resorts Third Quarter Financial Results Conference Call. Today's conference is being recorded.

Now at this time, I would like to turn the conference over to Jim Leahy of JCIR. Please go ahead.

James Leahy -- Managing Director

Thank you, April. Good afternoon, everyone, and welcome to Eldorado Resorts 2018 third quarter conference call. Joining us today from the company are Chairman and CEO, Gary Carano; Chief Operating Officer, Executive Vice President, Anthony Carano; and President and Chief Financial Officer, Tom Reeg.

On today's call, we will review the company's third quarter financial results and the ongoing success and progress against the company's other key strategic priorities. We will then open the call to participants for questions. This afternoon Eldorado Resorts issued a press release announcing its third quarter financial results for the period ended September 30, 2018. The release is available in the Investor Relations section of the company's website at www.eldoradoresorts.com.

Before we get started, I'd like to remind everyone that this call is being recorded and webcast replay will be available for 90 days. The details of which are in today's press release. During our call, we may make certain forward-looking statements about the company's performance, such forward-looking statements are not guarantees of future performance and therefore one should not place undue reliance on them. Forward-looking statements are also subject to the inherent risks and uncertainties that could cause actual results to differ materially from those expressed. For additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements, you should refer to the cautionary statements contained in our press release as well as the Risk Factors contained in the company's filings with the Securities and Exchange Commission. Eldorado Resorts undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after the call.

Also, during today's call, the company may discuss non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measures most directly comparable to each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website at www.eldoradoresorts.com by selecting the Press Release regarding the company's 2018 third quarter financial results.

Thank you for your patience with that. And at this time, it's my pleasure to turn the call over to the company's Chairman and CEO, Gary Carano. Gary?

Gary L. Carano -- Chairman And Chief Executive Officer

Thank you, Jim, and welcome to everyone joining us on today's earnings call. We've had both an active and productive very busy time since our quarter call last August. We again generated record quarterly financial results including third quarter same-store adjusted EBITDA growth of over 11% on top of the 16.2% increase in last year's third quarter. We also completed the accretive Grand Victoria Casino and Tropicana Entertainment transactions, ended into a landmark agreement with William Hill to address the national sports betting opportunities in front of us and announced the senior leadership transition, but I'm very confident we'll lead the Eldorado to even greater growth and success in the future.

This afternoon, we reported record consolidated third quarter adjusted EBITDA of $138 million, an increase of 12.6% year-over-year on net revenue of $504 million, which was down 2.2% year-over-year. Overall, the third quarter results continue to demonstrate our ability to implement best operating practices at both recently acquired properties, as well as the properties we've operated for some time. Beyond Eldorado's ongoing operating momentum, we also continue to successfully expand our regional gaming portfolio. In early August, we completed the acquisition of Grand Victoria Casino, one of the leading Chicagoland properties. Then at the start of the fourth quarter, we completed the acquisition of Tropicana Entertainment, adding seven additional properties in seven new markets to our family of great properties. Considering these acquisitions and the imminent divestitures of our Pennsylvania assets are great regional platform will feature 26 properties in 12 states, with almost 20,000 great team members.

In September, we completed what we believe is a landmark agreement to the addressing the emerging US sports betting opportunity. Our agreement with William Hill provides a number of value creating opportunities for Eldorado Resorts. We see sports betting is a great opportunity as it creates new visitation drivers for our properties with only minimal amount of marketing support needed, which will drive incremental gaming operated(ph)and non-gaming revenues. Given their expertise and scale, we view William Hill as the ideal partner to address the opportunity and believe the structure of our agreement with them, which also provides for an attractive equity stake in the US and global operations will create great shareholder value.

Finally, as you may know, this will be my final quarterly call with you as CEO, as we recently announced that effective January 1, I will move into the new role of Executive Chairman of the Board of Directors, and Tom will assume the role of Chief Executive Officer. One of Eldorado Resorts core strength is our commitment to providing our players with unmatched experiences with market-leading amenities, this strength is the hallmark of the Carano families approach to operating casinos, and it is something I personally take great pride in. I know that Tom and Anthony share this commitment and they prioritizes focus, while leading our initiatives to drive profitable growth.

Shareholders of Eldorado Resorts will be in great hands under Tom and Anthony's leadership, and I know the Carano family legacy as great casino operators will as well. With a diversified portfolio of quality assets, proven record of integration and synergy realization and talented leadership and dedicated team members, we're in a great position to continue to build shareholder value well into the next decade.

With that, let me turn the call over to Anthony. Anthony?

Anthony L. Carano -- Chief Operating Officer And Executive Vice President

Thank you, Gary, and good afternoon to everyone on the call. I'd like to take a few minutes to provide you with some high level operating perspective before Tom takes over to review the third quarter results in detail. Our property portfolio once again demonstrated solid strength with all the five of our operating segments growing quarterly adjusted EBITDA. By now you know we have a track record of growing adjusted EBITDA even with flat or declining revenue, and the third quarter EBITDA growth was achieved as net revenue declined in four to five reporting segments and declined by a little more than 2% overall. This record of growth is a direct result of our focus on increasing profitability at the property level through discipline with our marketing and promotional programs, advertising spend, purchasing, food and beverage management and labor expense.

Looking at our reporting segments. I'll start with the West region, where adjusted EBITDA was up 2.5% on very challenging comp as adjusted EBITDA was up 34.5% in the year ago quarter. Reno performed well up against an unfavorable July 4th calendar, and the 35% gain in last year's quarter. Black Hawk continued its strong performance with EBITDA margin topping 40% for the quarter. In the Midwest region, adjusted EBITDA rose 8.7% and the property-level adjusted EBITDA margin rose 400 basis points to 35.3% with all six properties generating year-over-year adjusted EBITDA growth, including Bettendorf, where adjusted EBITDA was up more than 22%, as we continue to implement the ERI operating playbook. We also added new Brew Brothers restaurant in Waterloo, and are building another in Boonville, and expect those new locations will help drive visitation and gaming revenue growth, similar to what we've experienced at other properties, where we've added our Brew Brothers concept. Now, on the south region, adjusted EBITDA was up 26.1% on a 530 basis point improvement in margin to 24.4%. Lake Charles, in particular had a huge quarter with EBITDA up over 70%.

Turning to the East segment, adjusted EBITDA was up 14.5% year-over-year, as the adjusted EBITDA margin rose 300 basis points to 25.1%. The Isle Downs continues to be a terrific asset for us, as adjusted EBITDA was up for the 15th consecutive quarter. And there are some good news for Mountaineer on top of the pending opening in the sportsbook, the property next week. The smoking ban in Hancock County was overturned a few weeks ago.

Finally, Grand Victoria Casino in Elgin, adjusted EBITDA grew 33.7% on a 690 basis point improvement in operating margin on pro forma basis.

With that, I'll now turn the call over to Tom, to provide detailed insights on the third quarter financial performance and additional details on our balance sheet and capital structure before we open up the call to Q&A. Tom?

Thomas Robert Reeg -- President, CFO & Director

Thanks, Anthony. Hello, everyone. I'll start by saying as we sit here today, this is the best operating performance that we have generated, since I've been involved with the company. Keep in mind that this third quarter that we just reported was up against a 16.5% same-store EBITDA growth comp, which I know top the entire sector by a wide margin last year. So, we're extremely pleased to be up on a same-store basis over 11%, 12.5%, if you add Elgin same-store. Really just a very strong performance against a very difficult comp, and in the quarter where Reno really didn't drive much in the way of growth. Reno had a very difficult comp, up 35% last year. The 4th of July calendar was difficult. So Reno EBITDA was down 24% in July. And rally(ph)back to be flat for the quarter, we then up 27% in September, and up over 30% quarter-to-date in fourth quarter. So Reno has roared back from a difficult comp in a difficult calendar.

And the other important thing to point out is that what you're looking at in terms of same-store is, all of the Isle properties in the legacy Eldorado after the first quarter, when we owned Isle. So, really all of the corporate savings at Isle had already rolled through for the most part. So, you're looking at property level improvements. And if you look at the average Isle property versus 2016, the range is up, EBITDA is up 20% to EBITDA is up 50%. Black Hawk EBITDA is up 50% on a two-year stack basis to 2016, our margins are up over 600 basis points. So, I hope this quarter starts to -- or continues to reinforce the message that we are doing something different at Eldorado. I meet with a lot of you during the quarter, and I hear a lot about what other companies are doing. I really have no idea what other companies are doing. I do know that in the numbers, there is no one that is close to what we're putting up in terms of same-store EBITDA growth.

And if you look to the fourth quarter, quarter-to-date, and I would caution you the first half of the fourth quarter is not as important as the second half, because the second half has New Year's in it, but quarter-to-date, our growth has accelerated. Our same-store EBITDA growth is considerably higher than the third quarter number. So, as I said, we are really humming operationally, as we sit here today.

As Anthony said, we closed on both Elgin and Trop Elgin during the quarter. In the beginning of August, we really didn't do much in terms of our typical playbook, in terms of changing things until just this week. We are out publicly with a $15 million synergy number in Elgin, I would expect to realize that in -- by the first half of 2019. And we are confident that we will significantly exceed that number as we move forward from there.

In Trop, we closed that deal October 1st, the most noteworthy thing about Trop before closing is, everybody was concerned as we were about the competitive impact of the Atlantic City openings. Atlantic City, the Hard Rock and Ocean opened June 28. And since opening through last weekend, Trop Atlantic City EBITDA is down 7%.

As people -- as you might recall, we were modeling a 20% hit from the openings, and Trop has significantly outperformed those expectations, prior to our arrival, thanks to our new East region GM -- our Regional Vice President, Steve Callender. He's done a great job out there, Trop as a whole has outperformed our expectations prior to owning it on day one, and in the subsequent couple of weeks, since we've owned it, we've already realized over $15 million worth of synergies. Our target there is $40 million, our announced target. We will meet that target in the first half of '19, and our early analysis suggests that, we will dramatically outperform that $40 million synergy target as we move through 2019.

As Gary and Anthony touched on, we cut a deal with William Hill during the quarter, and to describe the deal for us, we were looking for a partner that could run our books, but we were also mindful that the access to the US map that we could provide was a huge piece of value for a potential partner, and that we should be able to participate in the upside that we create for our partner. And we are thankful that William Hill, our current partner in Nevada, we're able to workout an attractive deal with them, where our split of our own sportsbook is around 50-50, and we own 20% of their US business. And if anybody paid attention to William Hill's investor update this week, they are targeting $300 million of US sports betting EBITDA by 2023, and 20% of that business will be ours, so we're excited about that as well.

We're excited about the Pompano development. We continue to move down the path with court issue, in terms of master planning and zoning work, I'd expect to be in front of you early in 2019 with renderings and more specifics as to what we're doing going forward. But really for us, the takeaways this quarter are very strong growth in the face of a very difficult comp, with an even stronger start to the fourth quarter. And we announced a $150 million share repurchase plan today that our Board authorized. We think it's not enough to tell you, we think our stock is cheap, given where we are in terms of operations and capital structure and free cash flow. We think it's time to start returning capital to shareholders as well, so you should expect to see us start buying stock.

And with that, I will turn it back for questions.

Questions and Answers:

Operator

Thank you. (Operator Instructions) And we'll first hear from Danny Valoy of Deutsche Bank.

Danny Valoy -- Deutsche Bank -- Analyst

Hi, guys. Thanks for taking my question and congrats on a great quarter.

Gary L. Carano -- Chairman And Chief Executive Officer

Thanks, Danny.

Danny Valoy -- Deutsche Bank -- Analyst

So, now that you've had some time to observe the Tropicana assets from the inside, can you talk a little bit about the difference in Tropicana's approach to customer acquisition versus how you operate your properties, and do you expect marketing or promotional spend to be the primary driver of synergies going forward or is there something else in terms of operational approach that you think drives the gaming tax adjusted margin delta between the two companies?

Gary L. Carano -- Chairman And Chief Executive Officer

Yes. Danny, I think the -- from what we can see early on Trop operates similarly to other operators that we have acquired in the past, which is very different than the way we operate. I think the Isle transaction is instructive, there was corporate savings there, there was purchasing, there was labor at the property level in addition to corporate and there was marketing, and we would expect to see the same buckets in Trop. But we're early on, but it looks like before we touch Atlantic City, Evansville and St. Louis, which are the three biggest Trop properties, we should be able to generate in excess of the $40 million targeted synergies. I think that we can get this combined portfolio in excess of a consolidated EBITDA margin of 30%.

Danny Valoy -- Deutsche Bank -- Analyst

Great. So, maybe just to hit on Mountaineer. I believe the property generated over $40 million of EBITDA, before the smoking ban and before some of the capacity in the surrounding market came online. Net-net with the repeal on smoking ban, how much of that EBITDA do you think you can claim back overtime?

Gary L. Carano -- Chairman And Chief Executive Officer

Well, the smoking ban was over three years old when it was overturned, so it's not as simple as just taking down the No Smoking signs and everybody comes back, it's going to be a process for us, it's certainly positive for us that our customers have the ability to smoke going forward. I don't think the -- if you're looking back to $30 million, $35 million, $40 million of EBITDA, we don't see a path back there, given the competition that has come into the area, and the change in behavior of the customers since the smoking ban was put in place. But we are -- it kind of runs in the mid-teens now, and we certainly think we'll do better than that with smoking, but I wouldn't expect it to be a material driver of consolidated EBITDA growth.

Danny Valoy -- Deutsche Bank -- Analyst

Understood. Just last one, if I may. Given how active the current M&A environment is, how much bandwidth you think the team has to pursue another acquisition opportunistically over the next, call it 12 months. And along those lines, would you be willing to partner with another real estate owner, if an attractive set of assets came on the block, or is there something in the master lease with GLPI, that potentially precludes you from doing that, and that's it for me? Thank you.

Gary L. Carano -- Chairman And Chief Executive Officer

Yes. There is nothing that precludes us from working with anybody. We will look at attractive opportunities as they arise. We're not -- we just -- since we just closed Tropicana as is typical for us, absent something showing up in front of us. We're not actively chasing anything and you shouldn't expect us to be doing that till(ph)back half of next year, but we are ready to act if there's something to do. But what I would tell you is we see a very strong shareholder return story from the current portfolio that we've put together with the -- and with the addition of the William Hill stake, and the Pompano real estate development, anything that we would do in the M&A arena would have to add to that shareholder return story and the more, the larger and more complex the transaction, the more it would have to add to that story.

Danny Valoy -- Deutsche Bank -- Analyst

Thank you.

Operator

Next, we'll hear from David Katz with Jefferies.

David Katz -- Jefferies -- Analyst

Hi. Afternoon, everyone.

Gary L. Carano -- Chairman And Chief Executive Officer

Good afternoon.

David Katz -- Jefferies -- Analyst

And well done. Two questions, one, with respect to Tropicana Atlantic City, I heard your comments and then obviously we've all been sort of watching that market very closely. And it has -- the competition has turned out to be less impactful so far from what we've seen. But we certainly share things on the ground, et cetera, that keep us watch all that, that may change. And my sense is, there has been some change at the competing properties. What can you share with us about making sure that we're not living in a false paradise about Atlantic City?

Gary L. Carano -- Chairman And Chief Executive Officer

Yes. David, I didn't mean to suggest in my comments that we don't share the concern that you're verbalizing, but we're almost five months in and we've seen a 7% EBITDA impact. So, even going into this older season and the winter months, it would take a -- just a dramatic fall off the table to get anywhere near what we were expecting. Steve and his team there have been doing a great job for us. I would tell you that October was the best month for us on a year-over-year comparison basis, since the -- from an EBITDA perspective since the competition opened. So, I know that there have been manager changes and rumors in the market about what's going on elsewhere, but the impact on us has been subsiding a bit from where it was early on.

David Katz -- Jefferies -- Analyst

Right. And if I can just touch on the other Trop properties that are now part of the family, if you could just talk a little bit about those opportunities, and in particular Laughlin is a landscape that's changing, and where some of the other -- either competitive or ROI opportunities you see out there would be helpful?

Gary L. Carano -- Chairman And Chief Executive Officer

Yes. I mean, Trop is a -- it's a basic blocking and tackling job, Anthony's now let us on through the MTR integration, the Reno integration, the Isle integration, so there's a whole lot of things that we learned throughout those, we learn -- frankly we learn more everyday about how to do this. But we've got a pretty good -- pretty good and lengthy checklist of things that we found things that have worked in other properties that we've acquired and we would expect to get to work on executing that on an individual property basis. In terms of the individual properties, Evansville has been absolutely fantastic since they went to land base, we're now anniversarying that, but it's still holding up very strong. There is really nothing in the way of competitive impact there to be concerned about. St. Louis, we see a lot of opportunity there. One of the things that we see in Trop generally is early on in the -- under icon ownership, they made a real push into the high end, and they ultimately retreated, but a lot of that higher end place stuck with the business, and we think that's an opportunity for us on the player development side kind of across the company in terms of what we can offer -- higher end player that maybe in St. Louis now or in Evansville or in Atlantic City, so we're excited about that. Loughlin, as you said, you're consolidating to an operator, where I would -- I'm comfortable with them in terms of rationality, in terms of competitiveness and marketing and they are the kind of operator we'd like to operate alongside. So, we're pretty excited about all of the properties that we're taking on here.

David Katz -- Jefferies -- Analyst

Got it. Thank you very much.

Gary L. Carano -- Chairman And Chief Executive Officer

Yes.

Operator

(Operator Instructions) Next, we'll hear from Chad Beynon of Macquarie.

Chad Beynon -- Macquarie -- Analyst

Hi. Thanks for taking my questions. Gary, congrats on all the hard work and Anthony, Tom well deserved, best of luck.

Gary L. Carano -- Chairman And Chief Executive Officer

Thank you, Chad.

Chad Beynon -- Macquarie -- Analyst

Yes. Thank you. The playbook is working as you mentioned, I think better than most expected better than your peers at least for this quarter and given the two-year stack that you mentioned for Isle, very impressive results, you're going to have tough comps next year getting those margins higher on -- I guess what we'll now call the legacy business will take a lot more work. So, when we think about 2019, any type of margin goals. Should we assume that the legacy business outside of Grand Vic and Tropicana will decelerate, I guess closer to what we're seeing with your peers, and a lot of the margin variance opportunities will be with Grand Vic and Trop or is there still more work to do on, I guess what we call the legacy business now? Thanks.

Gary L. Carano -- Chairman And Chief Executive Officer

Yes. Chad, the short answer would be, no. You shouldn't expect us to decelerate to where you're seeing same-store growth out of our peers. We are laughing, mid-teens comps kind of 12% to 16% same-store EBITDA growth for four, five quarters in a row now, if you adjust first quarter weather. So, I don't know that I'd be modeling 15% on top of 15%, but in the legacy portfolio for us to -- if you're expecting us to continue to do kind of high-single digit to low-double digit percentage growth, and then you're layering on your Tropicana and Elgin assumptions, you're probably getting close to what we see in front of us. And that as I'm talking, I think I get a lot of questions about -- are you running out of room, can you go too far, your peers are saying you can't keep doing this. We've been doing this for -- this is our fifth year of doing this at this point. And even with that in the combined portfolio, we spend on a trailing 12 months basis, almost $700 million in expenses that are related to customer acquisition. So, promo and free play and direct marketing and advertising, everything you would characterize is something to get a customer in the door. We spend $700 million a year, right now. This year in the legacy portfolio, we're on pace to cut that by something over $50 million. So, and you see the results that that's driving, so there's just a ton of opportunity, there is just a colossal amount of money wasted in our business and -- I think what we've done is, we've gone from wasting a colossal amount of money too, wasting a lot of money and you see the results that and so.

Chad Beynon -- Macquarie -- Analyst

Great. Thank you. And then on the William Hill partnership, the equity interest going forward from a reporting standpoint, will any of this being in the P&L. We also saw the Investor Day and I think they said on track for $50 million of EBITDA this year and near-term target of $300 million. So, is this just something that we should be doing behind the scenes, or is this something that you'll be reporting going forward either in a minority interest or --

Gary L. Carano -- Chairman And Chief Executive Officer

Yes. It will be difficult to see the window into their results through our SEC reported results. You're not going to see their -- their income statement flowing through ours, but they reported theirs every quarter including their US business in particular, every quarter. So, you should have a good idea of what that will be worth.

Chad Beynon -- Macquarie -- Analyst

Okay. Thank you very much. And congrats on that partnership. Sounds like a great deal.

Operator

Next, we'll hear from Barry Jonas of SunTrust.

Barry Jonas -- SunTrust -- Analyst

Hi, guys. I just wanted to dig into sports betting a little bit more, maybe just talk about some of the early results that you're seeing, whether it's direct from the business or increased visitation? Thanks.

Gary L. Carano -- Chairman And Chief Executive Officer

Yes. So we have very little to be able to say about our own business. We opened the Trop Sportsbook October 25th, I think, so we're really going into our third weekend of sports betting. What I would say is, we were very vocal ahead of time that we thought this was going to be a strong visitation driver for regionals, and we think that the early results from those that open books earlier bear that out in New Jersey and West Virginia, and we're excited to benefit from that as we open now with our temporary book open in Jersey, we'll build our permanent book quickly on the heels of that, and we'll have a West Virginia book open in the next week or two as well. So, we think that it will benefit us from a visitation perspective in addition to the profitability of the book itself.

Barry Jonas -- SunTrust -- Analyst

Great. And then any updated thoughts on moving any of your Louisiana riverboats to land?

Gary L. Carano -- Chairman And Chief Executive Officer

So, I would say it's highly unlikely we will do anything in Baton Rouge based on our early analysis there. In Lake Charles, you should expect us to look to move forward there. I think the right range of a project there is still $75 million to a $100 million in spend, and we should -- we would anticipate at least a 15% ROI on that investment. There is still work to do. We're early stages in terms of design and what we would do and discussions with the state as to our plans and their approval of them. So, I would be thinking of maybe something we're starting in the second half of next year that comes online in '20.

Barry Jonas -- SunTrust -- Analyst

Got it. And then just with the share repurchase announcement. Could you remind me what your leverage targets are, and anything we should be mindful in terms of the cadence of how you're thinking about share repurchases there? Thanks.

Gary L. Carano -- Chairman And Chief Executive Officer

I mean, so, we're -- if you give us credit for our synergies that we announced. On a pro forma basis we're 4.9 times levered lease(ph)adjusted gross at closing. We've always told you that we think four to five is the right place for us to operate, just in growth of the company before we pay down debt, we should be down into the low fours by the end of '19, and you should expect that the three or the four pillars for free cash flow are M&A, share repurchase, debt pay down, and growth CapEx. And M&A is obviously lumpy you don't know when it will come up. You should expect each of the other three to be a piece of our 2019 story.

Barry Jonas -- SunTrust -- Analyst

Great. Thanks so much, and congrats.

Gary L. Carano -- Chairman And Chief Executive Officer

Thanks, Barry.

Operator

John DeCree of Union Gaming.

John DeCree -- Union Gaming -- Analyst

Hi, everyone. Thanks for taking my questions. Tom, I wanted to kind of revisit some of your commentary on what you're seeing so far fourth Q to date. I think first, kind of same-store growth, I think your comment was accelerating in 4Q relative to 3Q, at least from what you've seen so far. I was wondering, if you could talk a little bit about if you're seeing some revenue growth there that maybe weren't anticipating or much of that is really just driven by everything that you have been able to do on the margin front so far?

Thomas Robert Reeg -- President, CFO & Director

I mean, I would say you should expect that, it's a kind of a continuation of our story, there is -- our customer feels strong. Our internal measurement are -- even though you see the overall SEC reported number. Our internal measurements showed at the top of our database revenue has been growing 6% in the third quarter, probably about the same in fourth quarter, but we're just really, I wish I could explain it better, we're just kicking ash this quarter, and it is early, and I would caution that a poor New Year's could change the story, but in New Year's calendar is better than last year and we're hopeful that it won't be the case. But we're off to a very, very strong start frankly, we typically do our conference call at this point in the quarter, maybe this is a week later than normal. This is the best start to the quarter we've ever had since I've been talking to you. And again, we're comping against a plus 16 same-store fourth quarter last year.

John DeCree -- Union Gaming -- Analyst

Got it. Good. One question as a follow-up on your sports betting partnership investment with William Hill, there are still some companies that are looking for and calculating market access on the sports betting front, is there anything in your agreement with William Hill that would preclude you from perhaps arranging another deal with sports betting company on market access, perhaps, particularly where there might be more than one mobile or online scanner license available?

Thomas Robert Reeg -- President, CFO & Director

No. We have -- our agreement with William Hill provides for the ability to monetize access scans, anything that we do on that front would flow through the William Hill structure in terms of economics that we would share. Yes, absolutely on a second scan basis this point in sports, we could sell the same access that we gave to William Hill, it just wouldn't have our physical casinos and you wouldn't have our database, but you would have the same access to the map.

John DeCree -- Union Gaming -- Analyst

Got it. That's helpful. Thanks.

Thomas Robert Reeg -- President, CFO & Director

And you should assume that has not gone unnoticed by us.

John DeCree -- Union Gaming -- Analyst

Yes. Thanks, Tom. I appreciate it.

Operator

Next, we'll hear from Joe Hudak of Wells Fargo Advisors.

Joe Hudak -- Wells Fargo Advisors -- Analyst

Nice quarter, gentlemen. Just a real quick question, do you have a timeline at Mountaineer when racing will be resumed?

Gary L. Carano -- Chairman And Chief Executive Officer

No. We're still working through that, we shut for two weeks, this is the middle of week one. I don't really have any color beyond that at this point, it shouldn't be an extended closure, but two weeks is where we're at now.

Joe Hudak -- Wells Fargo Advisors -- Analyst

Okay. Great. Thank you.

Gary L. Carano -- Chairman And Chief Executive Officer

Yes.

Operator

Brian McGill of Telsey Advisory Group.

Brian McGill -- Telsey Advisory Group -- Analyst

Good afternoon. Good results, guys. I guess I'm wondering with the election the other night in Florida, there won't be as potential, much new competition coming online, does that change anything you're trying to do at Pompano, and what's the timeframe right now, again, I'm sorry if I missed it?

Gary L. Carano -- Chairman And Chief Executive Officer

The timeframe for -- Pompano (Multiple Speakers) The timeframe in terms of construction and when we would be opening has not changed. You should see significant activity in '19, hopefully there's pieces that can open in '19, you'll see a lot. The bulk of it opened in '20 would be the expectation with the changes we talked. We talked about showing you more by the end of the year, I would say that's more likely early '19 at this point. I mean, in terms of what changed in Florida, it takes a few of the -- there's a lot of horse trading that goes on legislatively in Florida, particularly around casino gambling, the Amendment Three that passed on Tuesday takes a few of those players that were involved in that horse trading out of the equation. In theory, that makes it easier to come to an agreement. We would be interested in decoupling legislation as you might imagine. Legislative session starts early next year, this is the sweet spot right before legislative session opens that your lobbyist tell you everything is going to work out your way this quarter, and that's about where we are right now.

Brian McGill -- Telsey Advisory Group -- Analyst

Okay. And then how about at the Scioto, I know they've benefited a fair amount from the new hotel there, I guess, any other properties you could potentially look to build a hotel, as well?

Gary L. Carano -- Chairman And Chief Executive Officer

I think, Elgin and Cape Girardeau are the two that kind of scream out for hotel product in terms of similar math to -- in terms of where customers come from, as we found in Columbus, and we're exploring those possibilities and frankly, would love to do it in a partnership fashion again.

Brian McGill -- Telsey Advisory Group -- Analyst

So, you want to do a brand if you could to try to drive visitation like you are at(ph)Scioto with the loyalty networks?

Gary L. Carano -- Chairman And Chief Executive Officer

Yes. I mean, that's really been a home run for us, and shame on us for not realizing the power of it beforehand, but it's been a nice surprise since they open.

Brian McGill -- Telsey Advisory Group -- Analyst

Then the last one a little quick, I mean, it does -- I know people talked about Atlantic City, but it certainly seems like casino(ph)Boardwalk is taking the biggest hit, and I mean given the quality of those two entities that are there in that part of town. I mean, why would that really change per se, I guess going forward, it kind of seems like it's the North Boardwalk properties that I knew, you guys down south and closer to (inaudible) and then certainly the Marina(ph)that's away from the (inaudible) certainly seems like the challenges, kind in those older properties in the middle there, I mean, what's the thinking potentially on any sort of change to the competitive environment, I guess?

Gary L. Carano -- Chairman And Chief Executive Officer

I mean, what I would say is, icon -- under his ownership invested $200 million into Atlantic City over the past three years or so, and you can see it in the property and to your point there are other properties in the market that haven't had access to that kind of capital, and we think that was -- that's a critical piece of why they have held up or why Trop has held up in the face of the competition on the south end of the Boardwalk, you've kind of got your own -- your own zone there and Steve and his guys have done a great job of maintaining business models, and for the way we focus have maintained EBITDA, they could have just thrown a ton of money out of it -- at it, and not seeing it flow through and felt good about market share numbers, but we're particularly excited that it's flowed through to EBITDA.

Operator

(Operator Instructions) Next, we'll hear from Dan Politzer of JPMorgan.

Dan Politzer -- JPMorgan -- Analyst

Hi, guys. Good afternoon. Thanks for taking my questions. And also to Gary, Tom and Anthony. Congrats on the moves and good luck as you guys transition in your next leadership roles of the company. So, most of my questions have been answered, but a couple of minor ones, for Reno, I know it was a little weaker than I think we anticipated and you guys have attributed this outcome. Can you guys, I guess kind of paint a picture what the setup is like the 4Q, and you guys hit on October a little bit, and as we head into 2019, how should we think about performance in Reno, given you should benefit from the room renovations and what not you could do at the properties?

Gary L. Carano -- Chairman And Chief Executive Officer

Yes. 4Q is another tough comp, but off to an extremely strong start, really post July the business is kind of gone back to growing like it was growing before July. First quarter of '19 Safari club shows up, which is a significant piece of group business in the city that was not here. Last year, we had, as you know the first quarter is often determined by weather, which you don't know how that will shape up. Last year, we had the worst weather in March, which is really the worst time to have. Bad weather and we had massive snow, two years ago. So, maybe the third time's a charm for us, we're hoping it gets a little better. Second quarter next year, there are no bowlers(ph)versus the women this year, so that will be a tougher comp. Third quarter Interbike comes back.

Anthony L. Carano -- Chief Operating Officer And Executive Vice President

Also a very strong sales group in the fourth quarter, that's new to the market, next fourth quarter.

Gary L. Carano -- Chairman And Chief Executive Officer

Yes. So, I mean we feel generally very, very positive about Reno. July seem to be an anomaly. It certainly got our attention as we went through it, but the business has held up great. Rob Mouchou was now our West Region VP, he's done a fantastic job of making some changes. And Bill Gustafson was moved from our Columbus property and the two of them have implemented some changes that are bearing fruit right out of the gate. So, we feel very good about Reno.

Dan Politzer -- JPMorgan -- Analyst

Got it. And then just one quick one on housekeeping. How should we think about CapEx for the year. And then I guess on a normalized rate going forward?

Gary L. Carano -- Chairman And Chief Executive Officer

Yes. You should expect us to -- so we're -- 150 was our guidance, right Dan? I think that's right.

Dan Politzer -- JPMorgan -- Analyst

Yes. I think it was 150 split roughly equally between maintenance and growth.

Gary L. Carano -- Chairman And Chief Executive Officer

Yes. So, legacy property should be 150, Trops probably got 25 left in the fourth quarter, maybe 30, so maybe you're looking at 175, 180 on a consolidated basis, including Trops fourth quarter. As you look into '19, we're starting to look at what we do now, there is about a 100 -- let's call it a $120 million of maintenance CapEx. And then we're looking at growth projects as well, but we'll be back to you with what we expect for '19, if I were drawing a broad line -- a broad range at this point, I'd say it's somewhere in the 200 to 250 range, but probably toward the left side of that.

Dan Politzer -- JPMorgan -- Analyst

All right. Great. Thanks so much. And good job on the quarter.

Gary L. Carano -- Chairman And Chief Executive Officer

Thanks, Dan.

Operator

And that concludes the question-and-answer session for today. At this time, I would like to turn the conference back over to management for additional or closing comments.

Gary L. Carano -- Chairman And Chief Executive Officer

This is Gary. Thank you very much. And I'd like to thank everybody for joining us today, and hope everybody has a great holiday season. Thank you.

Operator

That does conclude today's conference. Thank you all for your participation. You may now disconnect.

Duration: 51 minutes

Call participants:

James Leahy -- Managing Director

Gary L. Carano -- Chairman And Chief Executive Officer

Anthony L. Carano -- Chief Operating Officer And Executive Vice President

Thomas Robert Reeg -- President, CFO & Director

Danny Valoy -- Deutsche Bank -- Analyst

David Katz -- Jefferies -- Analyst

Chad Beynon -- Macquarie -- Analyst

Barry Jonas -- SunTrust -- Analyst

John DeCree -- Union Gaming -- Analyst

Joe Hudak -- Wells Fargo Advisors -- Analyst

Brian McGill -- Telsey Advisory Group -- Analyst

Dan Politzer -- JPMorgan -- Analyst

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