Eldorado Resorts (ERI) Q4 2020 Earnings Call Transcript

Eldorado Resorts (ERI)
Q4 2020 Earnings Call
Feb 25, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Caesars Entertainment, Inc. 2020 fourth-quarter and full-year earnings conference call. [Operator instructions] I will now turn the call over to your speaker today, Mr. Brian Agnew, senior vice president of finance, treasury, and investor relations.

Sir, the floor is yours.

Brian Agnew -- Senior Vice President of Finance, Treasury, and Investor Relations

Thank you, Sarah, and good afternoon to everyone on the call. Welcome to our conference call today to discuss our fourth-quarter 2020 earnings. This afternoon, we issued a press release announcing our fourth-quarter financial results for the period ended December 31st, 2020. A copy of the press release is available on the investor relations section of our website at investor.caesars.com.

Joining me on the call today are Tom Reeg, our chief executive officer; Anthony Carano, our president and chief operating officer; and Bret Yunker, our chief financial officer. Before I turn the call over to Tom, I would Like to remind you that during today's conference 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. Caesars Entertainment undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after today's call. Also, during today's call, the company may discuss certain 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 in the comparable GAAP financial measure can be found on the company's website at investor.caesars.com by selecting the press release regarding the company's 2020 fourth-quarter financial results.

I will now turn the call over to Tom.

Tom Reeg -- Chief Executive Officer

Thanks, Brian. Good afternoon, everyone. We are thrilled to close the book on 2020. It was, by any measure, the most challenging year that we've had operationally and personally to date, the fourth quarter was no exception to that.

I want to start the call by recognizing all of our frontline employees. They live through -- the vast majority of our employees being furloughed, then coming back into an environment where they were fearful for health and safety, fearful for what was happening at home with children or parents or grandparents or all of the above. And they came back and delivered the exceptional service that our customers are accustomed to at Caesars and operated through some extraordinary contact tracing changes in regulations, reopenings, closings throughout the year, and we couldn't be prouder of them. For the fourth quarter, we did $346 million of EBITDA.

We've listened and read others' calls, our cadence were similar, almost half of our EBITDA happened in October. And then, as regulation -- restrictions tightened across the country, November and December were sequentially less than October. And we think the bottom for the business and we'll talk about what we've seen in January and February, and going forward that makes us highly confident of that. In In Las Vegas, we did $100 million of EBITDA, adding back the Rio rent payment which we're proud of on a relative basis.

But we know on an absolute basis, we've got a lot of wood to chop in Vegas as it reopens. We're seeing some encouraging signs there that I'll discuss. In the regional markets in the quarter, we had significant restrictions in Nevada, New Jersey, Colorado, Ohio that related to operating hours. We had closures in Illinois, Pennsylvania, that -- and the Lake Charles property from the prior hurricane.

If you exclude just the closed properties, you include everything that had the operating restrictions. Our regional EBITDA margins were up about 400 basis points for the quarter. So still seeing through the noise, strong evidence on the cost side, that those -- that that progress is continuing. If you look at -- you know, when I'm speaking to investors, I'm often asked, what am I missing? What is the market missing? And what I think the market is missing now is similar to what I talked about in the last quarterly call, the demand that is coming as the world reopens and the flow-through that you should expect to see in this business post-reopening is widely underestimated by the markets.

You know, I see kind of across the board in the sector, a view in numbers estimates out there that suggest we get back to 2019 numbers, kind of sometime in '23. I'm firmly convinced that we'll be at least run rating those numbers, the first quarter that Vegas Group business is back in earnest, and that could be as early as the second half of this year. So I think there's -- there needs -- there should be a dramatic pull forward of expectations of the turn and I'll give you a few examples of why I believe this to be the case. Currently, in Las Vegas, we are at our highest level of bookings since reopening.

January and February have ramped up. It's almost like a switch was flipped sometime late January, early February. Our bookings are up 20% on a month-over-month basis in the FIT and Casino segment. The -- we measure gross and net pickup.

So gross pickup is how many aggregate rooms are booked in a day or a week or whatever period you're looking at, net pickup is bookings less cancellations. And if you look at our gross and net bookings, nine of our top 10 days since the pandemic reopening in Las Vegas happened in February, with Monday being the highest that we have seen to date. Importantly, the booking window is extending as well. So if you look back to from reopening until the end of '20, it seemed like you had a lot of impulse trips, very short booking windows.

What we're seeing now is almost half of our bookings are for trips that are at least 30 days out, which is about double the pace that we had in the fourth quarter. So we're extremely encouraged by that. If you look at our actual performance, January and February, January was well in excess of November and December, approached October in terms of EBITDA, February has been strong as well, obviously, with fewer days in month ultimately. But if we -- as we look forward at our forward booking forecast, by mid-March we're well into the 50s in terms of percentage occupancy midweek on the strip and we're 95% plus on weekends.

If you look at our group business, for the second half of the year, we've got 32% more room nights on the books for the second half of '21 than we had for the second half of '19 on the same day. Now I'll grant you that we didn't have forum convention center in the fourth quarter of '19, but you're talking about almost $200 million of room night revenue on the books for the second half of the year for group business. And remember, when we talk about group business, those are the rooms that are booked for the actual event. So as those groups come and your guests decide to come early, bring their wife, bring their families, stay a little longer, those rooms are not included in that group room night business.

So we know that there's a lot of discussion and debate and prognostication about when the world will reopen. We're certainly heartened by all of the recent data, the vaccine advances in terms of coming supply. We're heartened by Governor Sisolak in Nevada, providing a path that has us in a position where we could be hosting group business by the middle of this year in earnest. And so we think there's light at the end of the tunnel there.

And when you look at -- what we're messaging to our internal operators is, let's make sure that all of the cost discipline that we have found over the last year or so remains in place as business comes back. And we had kind of an anomaly in the fourth quarter in the Tahoe Market, where California's regulations were far more stringent than Nevada. So you kind of got an early burst of demand that would sort of simulate what will happen in a reopening. And our team up there, John Koster and his team did a fantastic job of maintaining discipline on the cost side so that Tahoe was up 7% in gaming revenue in the fourth quarter, was up almost 60% in EBITDA, with EBITDA margins growing by over 1,100 basis points.

And it's that type of view that admittedly, you don't get to see that gives me optimism. If you look anecdotally at this past Saturday night in Las Vegas, nothing particularly interesting about it. It was -- we were 95% occupied, so you get to see what we look like virtually full. We were 99% last year at higher rates.

There was nothing particularly notable about hold or high-end play on that night and our EBITDA margins currently are running several hundred basis points ahead of last year same day. So as this business comes back, you're talking about filling rooms, room revenue that's extremely high margin. You're talking about high-end cash restaurant business coming back, you're talking about entertainment coming back. I think the recovery that's going to happen, the pace of it is going to be -- the magnitude of it is going to be far more dramatic than IC model and the pace, in my mind is certainly going to be much, much quicker.

And we're now, what, seven, eight months post-closing, the Caesars transaction, so we have done, obviously, quite a bit of integration post transaction. And I'd tell you that we have already well exceeded all of the synergy targets that we have out there and expect that to remain to be the case even after the world reopens and some of the costs come back. We think we'll be well in excess of both our pre-pandemic targets and the targets we added to during the pandemic. And then finally, in terms of my opening remarks, William Hill, I'm still limited in what I can -- we can say about that, given that the transaction has not closed yet, but we have two remaining kind of full regulatory meetings.

One in Nevada which is actually a two-parter and then one in Indiana. We anticipate both happening in March. Then, we have a final court date in the U.K., which is set for March 30th. Once we clear those, we will have cleared everything that we need to do to get closed.

So you should expect us to be closing sometime post that court hearing. We are working through all of the integration of William Hill, particularly, on the tech side. We think we will be well-positioned to have one of the best apps in the industry, integrated into Caesars Rewards on both the sports side and the casino side by the beginning of the football season in 2021. And with that, I'll flip to Anthony.

Anthony Carano -- President and Chief Operating Officer

Thanks, Tom, and good afternoon to everyone on the call. While 2020 was certainly a challenging year on many levels, I am extremely proud of our team members and their extraordinary dedication and commitment to running great properties. Our success this year could not have been accomplished without our team members' tireless efforts each day to provide a safe and healthy environment for our guests. Now turning to operations.

In Las Vegas, we generated $90 million of adjusted EBITDA in the quarter and $100 million of property level EBITDA, excluding the Rio rent payments. EBITDA improved over 40% on a quarterly sequential basis. October was our strongest month, where we generated approximately $50 million of EBITDA. Total occupancy for Q4 was 60%, with weekend occupancy of 80% and mid-week occupancy of 50%.

Casino mix as a percentage of our occupancy was over 50% during Q4. Looking ahead, we are encouraged by the booking trends for the second half of '21. Group and convention room nights on the books for the second half of '21 versus '19 are currently pacing up over 30% and we are seeing good rate growth as well. 2022 group pace is up 10% in room nights, with strong rate growth versus this time last year.

As we have mentioned before, future business on the books remains uncertain, but the strength of forward bookings tells us our customers are anxious to return to Las Vegas. On the FIT side, our booking pace continues to accelerate and it's at its highest level since reopening. Our booking windows are extending as well, 47% of Las Vegas market bookings since the beginning of the year or for at least 30 days out, almost double the percentage that we saw in the fourth quarter. In 2021, we are planning several property improvements in Las Vegas, including completely transforming the arrival experience at Caesars Palace which has largely been untouched since the property opened in 1956.

In addition, we will be adding several exciting new food and beverage concepts across our Vegas properties. In our regional markets, operating results were negatively impacted by property closures and incremental COVID-19 restrictions during the quarter. At our closed properties, we continue to pay team members' salaries and benefits throughout the quarter. In our regional nondestination properties and excluding property closures, revenues were down 17%, EBITDA was down 6%, and EBITDAR margins improved approximately 400 basis points.

Ten regional properties within the portfolio reported quarterly EBITDA and/or EBITDA margin records. We have spent the last year refining our cost structure in both our destination and regional markets, and we expect meaningful EBITDA flow-through its recovery unfolds in '21. This should also lead to higher sustainable EBITDA margins. We are excited about the year ahead and we remain confident in the eventual recovery of travel and tourism in the U.S., and especially here in Vegas.

With that, I'll now turn the call over to Bret for some additional insights on the fourth quarter and details on our balance sheet and capital structure. Bret?

Bret Yunker -- Chief Financial Officer

Thanks, Anthony. So we decided to mix things up a bit in the fourth quarter and went from buyers to sellers, with the most significant announcements being the sale of two of our Indiana assets, yielding us over $1 billion of rent adjusted debt relief. Over $700 million of which is in the form of cash proceeds that we expect to receive during the second and third quarters of 2021. These proceeds further augment approximately $4 billion of year-end liquidity across our unrestricted cash on hand and available revolvers.

We are well-positioned to close on William Hill, which as Tom mentioned, we expect to happen early in the second quarter and our nearest debt maturities in December of 2024. Capex for 2021 is expected to land between $350 million and $400 million, excluding Atlantic City and Lake Charles which we will be funding from escrow and insurance proceeds. Back to you, Tom.

Tom Reeg -- Chief Executive Officer

Thanks, Bret. With that, we will open it up to questions.

Questions & Answers:

Operator

[Operator instructions] Your first question comes from the line of Jared Shojaian from Wolfe Research. Your line is open.

Jared Shojaian -- Wolfe Research -- Analyst

Hi, good afternoon, everyone. Thanks for taking my question. So, Tom, I really appreciate all that commentary. That was extremely helpful.

Do you think we need to see Vegas meaningfully improve to the levels that you're talking about and getting back to those prior 2019 run rates before we see a Vegas asset sale? Is that kind of how you're thinking about it?

Tom Reeg -- Chief Executive Officer

Yeah. So and thanks for asking that question because I should have addressed that in the opening remarks. I've read a lot of comments about how we're about to sell Planet Hollywood, if whoever knows what's happening there can call me and tell me what we're getting for it, I'd appreciate it. But there are no assets for sale in Las Vegas in our portfolio.

We do still anticipate selling an asset in the future, but I want to be marketing that asset off of actual performance stewardship, not having to build a story, build a bridge to what it's doing today versus what we think it will be doing. So I would say based on what I'm seeing, you should expect a sale, unlikely to take place in '21, probably looking at sometime in '22, most likely first half.

Jared Shojaian -- Wolfe Research -- Analyst

OK. Thank you. And just to switch gears here on sports betting and iGaming. I know, Tom, in the past, your message has been that your interactive digital business is profitable, whereas, competitors are not.

I guess a multipart question here. Is online sports betting and iGaming profitable for you? I know iGaming is, but I guess, the first question is, online sports profitable as well and how has your strategy evolved on that thinking? I mean, do you think that it's time to start getting more promotional and start to capture more market share? Maybe you can just help us think about how you're thinking about that. And then do you need to get this William Hill deal closed before you start maybe a more robust strategy on that front?

Tom Reeg -- Chief Executive Officer

So I'm limited in what I can say here. The answer to the first question is, yes, we are profitable in all verticals in that business. On the second piece, William Hill has been in a bit of suspended animation since we announced the transaction, where obviously, they were not integrated into Caesars when we announced it. There's not a lot that we're able to do in the period between signing and closing.

So William Hill faced a situation where they had a brand that they knew was ultimately going to go away as the main driver of the business. So it made little sense to spent a lot of money to build a brand that's going to change early in 2021. We have not been in-charge of that -- the operating side of that business in the past. So we will -- we're in this to be a winner and if the answer is we need to invest more money to build market share in whatever form that takes, you should expect that we would consider that.

I consider us to be a pretty strong operating team. You shouldn't expect that to be any different when we're managing the sports and online business.

Jared Shojaian -- Wolfe Research -- Analyst

All right. Thank you very much.

Operator

Your next question comes from the line of John DeCree from Union Gaming. Your line is open.

John DeCree -- Union Gaming -- Analyst

Hi, everyone, thanks for taking my question. I guess to maybe build off that last discussion a little bit, Tom. I'm wondering if you could talk a little bit about your thoughts on the iGaming trajectory? I think in the last discussion, talked about profitability in that segment and it's a business that Caesars has been in for a while. I think we've seen some legislation around in Illinois and being considered in Indiana.

So a lot of discussion on sports betting, but it seems like Caesars has a particular advantage, given the experience in iGaming. I'm curious to get your thoughts on the pace of that market rollout?

Tom Reeg -- Chief Executive Officer

Yeah, John, as we've discussed, I think that the miss in that area of the market in terms of expectations is the view that iGaming is going to significantly trail sports, and ultimately, not be legalized in nearly as many jurisdictions in my experience, when states start to see the revenue feeding in from something like sports. I think their inclination is going to be to expand that and iGaming is certainly an easy path there. I'm encouraged by the January numbers that we saw in effectively two and a half states that suggest iGaming from a total market standpoint is already pushing $3 billion. We are significantly profitable there.

That business keeps growing for us. We obviously think we are well-positioned there and in sports with Caesars Awards and we think we're well-positioned to take advantage as iGaming continues to roll out.

John DeCree -- Union Gaming -- Analyst

Tom, if I could ask a follow-up on that. I'm not sure how much detail you're prepared or can talk about. But we get a lot of questions on crossover play and I don't know if you have any stats out of New Jersey? Or anecdotally, if you could tell us anything about how much of the Caesars Rewards database is playing online? Or how many customers were acquired online into the Caesars Casino for iGaming, specifically?

Tom Reeg -- Chief Executive Officer

Yeah. I'm not going to be disclosing that level of detail until we've -- after we've closed William Hill out of an abundance of caution.

John DeCree -- Union Gaming -- Analyst

Fair enough. I can appreciate that. If I could ask a second one instead. On Daily Fantasy Sports, you've made a minority investment in a business.

And obviously, the cross-sell rate we've seen from competitors has been pretty high. But I wonder if you could give us a high level on the strategy and thought process as to how you might leverage that going forward?

Tom Reeg -- Chief Executive Officer

Yeah. For us, it was twofold, really. You had -- we think we were acquiring the customers at a particularly attractive acquisition cost and the ability to fold it into Caesars Rewards quickly and their capabilities positioned us well to start to grow that business. And it was also an obvious hole in our lineup as we talked with partners in the sports world, both teams and the NFL itself.

So we -- that was effectively, what we did was we rolled our flutter stock that we got in the TSG skins deal into the investment into super draft which given, what had happened to flutter stock and where we think we can take super draft, we thought that was a good trend for us.

John DeCree -- Union Gaming -- Analyst

Understood. Thanks, Tom. I appreciate it.

Operator

Your next question comes from the line of Carlo Santarelli of Deutsche Bank. Your line is open.

Carlo Santarelli -- Deutsche Bank -- Analyst

OK. Great. Thanks, guys. Tom, you obviously talked a lot about kind of the Las Vegas recovery and what you're seeing in group and noting that you believe you could be on kind of a 2019 run rate as early as the second half of this year.

So my question around that is just, obviously, with the group demand that you guys see on the books, it's pretty good visibility into it. Could you maybe quantify kind of what revenue level relative to 2019 you guys think you need to be at on a quarterly or annual run rate basis to kind of achieve 2019 like EBITDA levels in Las Vegas, specifically?

Tom Reeg -- Chief Executive Officer

I mean, I think you should be thinking about a minimum of 500 to 1,000 basis points of margin expansion on a consolidated basis. So you can do the math that backs into where would we get to, call it, $3.5 billion which was the pro forma Colorado and Caesars numbers in '19, plus the $500 million of synergies we announced in the original deal.

Carlo Santarelli -- Deutsche Bank -- Analyst

OK. And that would be off the pro forma kind of 28 and change margin from 2019?

Tom Reeg -- Chief Executive Officer

Yeah. I would expect the mid-30s at a minimum and I think we'll be chasing 40 pretty quickly.

Carlo Santarelli -- Deutsche Bank -- Analyst

Great. Thank you. And then if I could, as you guys think about the regional portfolio, obviously, you've had multiple transactions over the last year plus. Is there anything else that you guys are looking at across the board in your regional portfolio that you would consider kind of noncore? Any regions where you feel like potentially that there could be something that you'd want to do to kind of clean up the portfolio or get it more tailored to kind of what you're trying to do with the business going forward?

Tom Reeg -- Chief Executive Officer

I would say unlikely that we would be a buyer of anything material that's already operating domestically. If markets like New York and Texas open up to commercial casinos, we would certainly take a hard look as to whether it would make sense for us to play there.

Carlo Santarelli -- Deutsche Bank -- Analyst

Good. Great. Thank you very much.

Operator

Your next question comes from the line of Thomas Allen from Morgan Stanley. Your line is open.

Thomas Allen -- Morgan Stanley -- Analyst

Hi, thank you. So when you announced the William Hill deal, you talked about reaching $600 million to $700 million of Sports Bay and iGaming revenues in 2021. Do you still think that's a good target?

Tom Reeg -- Chief Executive Officer

I can't update any numbers that aren't in the public filings, Thomas.

Thomas Allen -- Morgan Stanley -- Analyst

OK. I thought it was worth a shot. So switching gears a little bit. You know, when we think about the strength that we're going to see in Vegas kind of, hopefully, in the second half of this year into 2022.

Can you just talk about how you're managing your rooms? Like, are you holding back convention bookings because you think that kind of FIT business is going to be so strong, like, how do you do that? Thank you.

Tom Reeg -- Chief Executive Officer

No. I mean, keep in mind, the -- your booking windows are entirely different. When you're booking a convention, you're typically booking for many months or typically more than a year out. And we've got a block of rooms that typically rolls about 15% of our total room capacity and there's no need to artificially reduce that for expectations of what can happen.

In FIT, you're really managing that from a rate perspective and we've got a team here led by Pavan Kapur, who is already at Caesars, who are the best in the business at yielding and revenue management. And that's been evident in our results for a couple of days ever since the closing and that's who we lean on as we move forward.

Thomas Allen -- Morgan Stanley -- Analyst

I guess, asking that question a different way, like, are you guys keeping rates steady? Or even increasing rates for the groups that you are booking into 2022 in the second half of the year because of your confidence around group?

Tom Reeg -- Chief Executive Officer

The group business in the second half of the year is at higher rates than '19 and it's pure supply demand within that block.

Thomas Allen -- Morgan Stanley -- Analyst

OK. Perfect. Thank you.

Operator

Your next question comes from the line of Steven Wieczynski from Stifel. Your line is open.

Steven Wieczynski -- Stifel Financial Corp. -- Analyst

Yeah. Hey, guys, excuse me, good afternoon. So, Tom, if we go back to your Vegas commentary around the -- that group business could come back in some material form as early as the middle of this year. You know, look, I understand you have a significant amount of more room nights booked at this point.

But I guess, the question is, you know, how many -- and I don't know if you can answer this. But how many of these nights do you think will actually pan out or materialize, meaning the conventional group meeting takes place and those folks actually show up?

Tom Reeg -- Chief Executive Officer

Yeah. And that's part of what Pavan's group does in terms of forecasting and managing the revenue, as you're assuming that in any environment, 100% of those room nights are going to ultimately show up. The discount from what we would have been discounting in '19 in terms of expectations of what would show up is larger. But we think, given what we're seeing in FIT and casino in terms of that wave of demand, we feel very good about where we'll be whenever that business does come back in earnest.

Steven Wieczynski -- Stifel Financial Corp. -- Analyst

And that's irregardless of basically where airline capacity is at that point? Does that have anything to do with it?

Tom Reeg -- Chief Executive Officer

Yeah. I mean, in airline capacity in this market has been a lagging indicator when you've got the demand for people to show up, more seats tend to flow to this market. And that should, in particular, be the case in an environment, where airline performance as it's been.

Steven Wieczynski -- Stifel Financial Corp. -- Analyst

OK. Gotcha. And then, Tom or Bret, can you update us on where you stand today in terms of leverage targets or goals and the timelines around potentially getting to those? And then, Tom, I want to -- I don't think we've talked about this in a while, but the original $10 free cash flow target, is that still in play at this point?

Tom Reeg -- Chief Executive Officer

Yeah. Steve, I see you started to creep down to $7.5 or $8, but I'm still at $10.

Steven Wieczynski -- Stifel Financial Corp. -- Analyst

I'll adjust.

Tom Reeg -- Chief Executive Officer

I'm highly confident we will be $10 a share of free cash flow. The -- in terms of leverage nothing has changed. We have more leverage than certainly, we anticipated going into the deal, obviously, a function of the pandemic. And we -- you should expect us to be as soon as we are generating significant free cash flow again, you should expect us to be -- No.

1 target is debt paydown. And we fully expect to drive leverage sub-4 times on a gross lease-adjusted basis. And as we do that, we'll see -- we are reaching a point of diminishing returns in the equity or do you push it further and we, as you know, Bret and I both come from fixed-income background. So we tend to be a little more conservative here anyway and we recognize the benefit of the flexibility to be having less leverage provides and the wider potential equity buyer audience that it creates, and we are going to get there as soon as we possibly can.

Steven Wieczynski -- Stifel Financial Corp. -- Analyst

OK. Great. Thanks, Tom. I appreciate it.

Operator

Your next question comes from the line of Stephen Grambling from Goldman Sachs. Your line is open.

Stephen Grambling -- Goldman Sachs -- Analyst

Hey, thanks. As we think about some of the upside that you found in the initial synergies in this potential margin to 40%, where are the biggest opportunities being uncovered?

Tom Reeg -- Chief Executive Officer

I mean, it's a whole different operating model, Stephen, than it was before. We've been talking about this since reopening. The marketing environment is entirely different. The pieces of the properties that are open are entirely different and some of the most labor-intensive pieces or the areas where you were losing the most money are never coming back.

And layer on top of that, we were in the middle of a combination in the merger that would normally lead to synergies through reducing redundant capacity and Caesars was certainly much heavier in the corporate departments than we have historically run. And if you roll all that together, that's how we get to the margins we expect we can get to.

Stephen Grambling -- Goldman Sachs -- Analyst

And I guess, this is an unrelated follow-up. When you've seen this ebb and flow of customers and restrictions, both in Vegas and at the regional properties. How is the customer that's showing up evolve? And are you seeing new customers that are signing up for the rewards program? Or is it mainly existing customers rewards programs? Thank you.

Tom Reeg -- Chief Executive Officer

Yeah. You've got a mix of both. Obviously, given the size and the effectiveness of the Caesars Rewards system, we've seen a lot of rated play come back. But we have seen significant increases in the under 35 crowd that, unfortunately, is more than offset by decreases in the over 55 crowd.

And in terms of how it's evolved, it's been a fairly consistent, kind of everyone moving at the same time. If you look -- if you segment our groups by our business by rated and unrated or by age cohort, you've seen similar behavior in terms of how much they're down since reopening. And then when the restrictions tightened and then when we started to reopen again, they've kind of moved in lockstep.

Stephen Grambling -- Goldman Sachs -- Analyst

Great. Thank you.

Operator

Your next question comes from the line of Chad Beynon from Macquarie. You may ask your question.

Chad Beynon -- Macquarie Research -- Analyst

Hi, good afternoon, thanks for taking my question. Tom, I just wanted to follow-up on your last remark there. I believe you mentioned that the regional -- the non-destination regional revenues were down 17% in the quarter, obviously, including markets with restrictions. Do you have a sense of what this was in periods and at properties, where there weren't restrictions? Or I guess, more importantly, when this starts to ease and we kind of get the vaccinations in, do you think this can be closer to kind of a flat to slightly down? Just trying to figure out what was intentional versus everything else that was going on in the quarter? Thanks.

Tom Reeg -- Chief Executive Officer

Yeah. The answer is -- the short answer is the way you laid it out, yes. If you took -- obviously, Chad, you know, we've got Atlantic City, Reno, and New Orleans in our regional properties which have heavy dependency on rooms. So those are the properties that were most impacted in the quarter in terms of restrictions.

And if you went to our true regional assets, if you were trying to compare us to, say, a pan or a boy to regional. You say, yeah, we would have been around flat in revenue and EBITDA expansion would have been several hundred basis points ahead of the 400 basis points I pointed to earlier.

Chad Beynon -- Macquarie Research -- Analyst

OK. Perfect. Thanks. And I know in the past, you've said that you're not interested in any assets outside of the United States.

Can you just confirm that? And then also give us an update on where the Korea project sits and if there's any additional capital that needs to be funded from your side of the relationship?

Tom Reeg -- Chief Executive Officer

So we still have a Windsor management contract in Ontario. We would expect that we're going to continue to operate that. You should expect that over time that will be the extent of our non-U.S. business.

Ask again the second piece, Chad?

Bret Yunker -- Chief Financial Officer

About Korea.

Chad Beynon -- Macquarie Research -- Analyst

Korea, yeah. Thank you.

Tom Reeg -- Chief Executive Officer

Korea's gone. We sold it for some Barbecue pork.

Bret Yunker -- Chief Financial Officer

We're completely out.

Tom Reeg -- Chief Executive Officer

We sold it back to our partner. We have no more commitment, we're out.

Chad Beynon -- Macquarie Research -- Analyst

OK. Thank you very much. I appreciate it.

Operator

Your next question comes from the line of Daniel Politzer of J.P. Morgan. Your line is open.

Daniel Politzer -- J.P. Morgan -- Analyst

Hey, guys, good afternoon. Thanks for taking my questions. Tom, you mentioned that you've seen an uptick in the younger unrated play or similar to a lot of your peers. I guess, to what extent, if any, have you been able to kind of get them onto the Caesars Rewards program and maybe start to cycle them through to maybe your sports betting or iGaming apps? Any color there would be helpful.

Tom Reeg -- Chief Executive Officer

You know, we're pretty good at when people come to visit, signing them up to our program. The under 35 crowd has not been any different than any other new cohort that shows up at the property. So we've converted them to Caesars Rewards. Remember that Caesars Rewards is not yet connected to sports and online since we have not closed the William Hill transaction.

So it's not yet, frankly, as seamless as it will be a few months from now in terms of moving customers out of Caesar -- from Caesars Rewards on to our [Inaudible].

Daniel Politzer -- J.P. Morgan -- Analyst

Got it. All right. And then just kind of switching gears in terms of market access for sports betting. You know, your regional gaming footprints, obviously, among the largest of your peers.

Can you remind me of some of the outstanding access agreements maybe you have? And I know you announced one today, but maybe if you could put some numbers around book ending this opportunity as it relates to high-margin revenues here?

Tom Reeg -- Chief Executive Officer

That's another one I should wait until after we close William Hill. Are you're talking about the access agreement sales that we're doing?

Chad Beynon -- Macquarie Research -- Analyst

Right. Exactly.

Tom Reeg -- Chief Executive Officer

Yeah. I mean, let us get to -- as soon as we close William Hill, we can get some data out on that. I'm trying to stay within the four corners of what's been filed there.

Chad Beynon -- Macquarie Research -- Analyst

All right. Understood. Thanks so much.

Operator

Your next question comes from the line of Daniel Adam of Loop Capital. Your line is open.

Daniel Adam -- Loop Capital -- Analyst

Hey, thanks for taking my question. Keeping it very simple, Tom, is it safe to conclude at this point that Las Vegas is now as things stand today in recovery mode? And then just related to that, is it possible to see a full revenue recovery, not necessarily EBITDAR, but revenue recovery on the strip, even if business travel and convention demand never fully return?

Tom Reeg -- Chief Executive Officer

If business travel convention demand never fully returns, I don't think -- I think you're going to have trouble getting back to 2019 revenue numbers. Remember, that group business, even though it's only 15% of our business, it's a big piece of cash operating income in high-end restaurants in entertainment. So that's an important piece of our business, even though it's only 15% of our business. It's an important piece of business for our peers in the market where it's larger.

In terms of our -- I would describe it as we've been wandering in the for almost a year now since we started shutting down and you can clearly see the light shining through at this point in Las Vegas in terms of customer behavior. Just the people booking -- the pace of the booking and the fact that it's people actually planning trips in the future is a sea change from where it was in 2020. And given our database and what we can mine here, we feel very good, presuming there are no further public health setbacks, which obviously, is a big presumption, given what we've seen, we feel very good that we've seen the bottom in Vegas and in the business and that we're only going to keep getting better sequentially.

Daniel Adam -- Loop Capital -- Analyst

OK. Great. And then on the online gaming and sports betting side, to the extent you can comment on this. You know, so DraftKings and FanDuel currently seem to be the clear No.

1 and No. 2 players in most markets with William Hill and MGM. And I guess, you can say [Inaudible] even though they're only in two states sort of establishing themselves as the second-tier in the market. I guess, longer-term, where do you think, you know, within that second tier.

Where do you think long-term margins can settle on the iGaming and sports betting side, not necessarily commenting about William Hill specifically? Thanks.

Tom Reeg -- Chief Executive Officer

I think you're looking at a 25% to 30% EBITDA margin business at maturity for your top-tier operators in the market.

Daniel Adam -- Loop Capital -- Analyst

OK. Great. Thanks so much.

Operator

Your next question comes from the line of David Katz from Jefferies. You may ask your question.

David Katz -- Jefferies -- Analyst

Hi, good evening, thanks for fitting me in. I wanted to go back to the online question first, if I may, and just speak as high level and strategically as you're permitted to do. But is it a business where you believe you need to be in all of the available states? Obviously, some of the larger ones, it's obvious where you have access and others where you may not. Do you need to be in all the states to be successful? Is that part of your definition?

Tom Reeg -- Chief Executive Officer

I mean, it's part of our plan. We have access between what we -- we're in 15 states operating plus D.C. It should be 20 jurisdictions by the end of this year. We have access to nearly 80% of the U.S.

population in our system and you should expect us to be pursuing the opportunity everywhere that we can.

David Katz -- Jefferies -- Analyst

Got it. And with respect to just regional gaming, again, philosophically, we have so many discussions about sort of what the new regional gaming experience will be in a post-COVID world. And I think, it's easy for all of us to slip into a discussion in absolute terms where margins are great in regional casinos, but there's nothing to eat. You need to lunch pail it.

And perhaps, there's the other end of the spectrum, where we do cover operators, who happen to like their food offerings and lead with it. My sense is there's a reality that doesn't lie at, either end of that spectrum. How are you thinking about that?

Tom Reeg -- Chief Executive Officer

So this is something we talk about quite a bit. Your customers in the regional market, as we started to point out five-plus years ago, they show up for hours at a time. It may be the case that that happens to coincide with when they want to eat, they may get hungry while they're there. You can't have nothing, but you don't need to lose money nearly and certainly, nearly as much money as this industry has lost feeding people.

You know, I'm old enough to remember when casinos were only in Nevada and New Jersey and yet, in those other 48 states, everybody figured out how to eat dinner. And once the casino is opened, it became how do we feed them dinner and let's just give it away for free because God forbid they go stop at McDonald's on the way home. We -- I can't speak for what others will do. We're going to be smarter about where we're in and how we're in the food and beverage business, and just make sure we're not bleeding $3 million in every buffet in the country.

We're going to figure out how to do it in a way that meets customer demand and maximizes our profitability.

David Katz -- Jefferies -- Analyst

All right. And it's not going to be something that is going to be a competitive decision along the way, right? It's not going to -- it'll be a competitive experience with what everyone else is doing for the most part.

Tom Reeg -- Chief Executive Officer

I am not concerned that I'm hamstring myself competitively with my food and beverage offerings.

David Katz -- Jefferies -- Analyst

Got it. Thanks so much. I appreciate it.

Tom Reeg -- Chief Executive Officer

Thanks, David.

Operator

Your next question comes from the line of Barry Jonas of Truist Securities. Your line is open.

Barry Jonas -- Truist Securities -- Analyst

Hey, guys, thanks for fitting me in. Just, uh, can you give us an update on the Pompano development? And with that, any thoughts on the prospects of sports betting in Florida?

Tom Reeg -- Chief Executive Officer

On the Pompano development, we continue to work through the planning and local zoning. We are racing this season. We are -- we have a highlight license that we can move to. There has been litigation around that license.

We would like to see if we can resolve that amicably, but you should expect that everything that was -- that we've talked about in the past remains on the table. Obviously, I would have hoped it was -- construction was in earnest, well in earnest at this point. So the timing has not been as quick as we'd hope, but the opportunity and the plan has not changed. In terms of Florida sports betting, Florida is an interesting place.

Every year as the legislative session starts, your lobbyist tend to be super optimistic about what they're going to deliver. And then by the end of the session, they say, well, we just couldn't get anything done. It's a complex place to negotiate. You've got, obviously, the Seminoles down there, the commercial casinos, you've got Disney, you've got Miami interests.

So, you know, I think, like other places, the momentum publicly for wanting to be able to bet on sports is no different in Florida than elsewhere. Is that enough to break a log jam this year? I would probably bet no, just because that's what Florida has shown me in the past, but I'm hopeful I'll be surprised.

Barry Jonas -- Truist Securities -- Analyst

Got it. And then just while we're at it, any thoughts on Texas?

Tom Reeg -- Chief Executive Officer

Texas is -- that's another state where I'm highly confident there will be significant public interest. Can you get through the legislature there with all the various competing bodies? The odds would be against you, given what's happened there historically, but we're working there as well.

Barry Jonas -- Truist Securities -- Analyst

I really appreciate it. Thanks, Tom.

Tom Reeg -- Chief Executive Officer

Thanks, Barry.

Operator

Your next question comes from the line of Sean Kelly of Bank of America. Your line is open.

Sean Kelly -- Bank of America Merrill Lynch -- Analyst

Hey, thanks, everyone. Maybe just one question for me, Tom. Because it's sort of been, I think, as in a bunch of different ways, but if I was going to think about it pretty simplistically for the -- like, by the fourth quarter, is it possible to basically get back to historical run rates of revenue in Las Vegas without citywide compression? You've done such a good job on the casino block. And clearly, you got the group piece and that's an in-house number.

So not thinking about business travel, but just if you don't have compression in the market, can you just based on the mix shift that you've already done, kind of get pretty back to what would look like normal without that? Or do you need the market to go along here?

Tom Reeg -- Chief Executive Officer

Well, I think in terms of EBITDA, not revenue. So I can't conceive of a scenario where we're testing 2019 revenue and the rest of the market has not lifted with us. I think that we have the benefit of the rewards program that helps us from a revenue management standpoint. But if pick your property is running at 55% occupancy because groups aren't here, it's unlikely we're going to be running at 96% occupancy which was the pre-pandemic number.

Sean Kelly -- Bank of America Merrill Lynch -- Analyst

Got it. Thank you very much.

Operator

I am showing no further question at this time. I would like to turn the conference back to Mr. Tom Reeg.

Tom Reeg -- Chief Executive Officer

All right. Thanks, everyone. We will talk to you next quarter.

Operator

[Operator signoff]

Duration: 60 minutes

Call participants:

Brian Agnew -- Senior Vice President of Finance, Treasury, and Investor Relations

Tom Reeg -- Chief Executive Officer

Anthony Carano -- President and Chief Operating Officer

Bret Yunker -- Chief Financial Officer

Jared Shojaian -- Wolfe Research -- Analyst

John DeCree -- Union Gaming -- Analyst

Carlo Santarelli -- Deutsche Bank -- Analyst

Thomas Allen -- Morgan Stanley -- Analyst

Steven Wieczynski -- Stifel Financial Corp. -- Analyst

Stephen Grambling -- Goldman Sachs -- Analyst

Chad Beynon -- Macquarie Research -- Analyst

Daniel Politzer -- J.P. Morgan -- Analyst

Daniel Adam -- Loop Capital -- Analyst

David Katz -- Jefferies -- Analyst

Barry Jonas -- Truist Securities -- Analyst

Sean Kelly -- Bank of America Merrill Lynch -- Analyst

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