Q4 2023 Bally's Corp Earnings Call

Participants

Charlie Diao; SVP, Finance and Corporate Treasurer; Bally's Corporation

Robeson Reeves; CEO; Bally’s Corporation

George Papanier; President; Bally’s Corporation

Marcus Glover; CFO; Bally’s Corporation

Barry Jonas; Analyst; Truist Securities, Inc.

Jeff Stantial; Analyst; Stifel, Nicolaus & Company, Inc.

Jordan Bender; Analyst; JMP Securities LLC

Chad Beynon; Analyst; Macquarie Capital (USA) Inc.

Jonnathan Navarrete; Analyst; TD Cowen

David Katz; Analyst; Jefferies LLC

Brandt Montour; Analyst; Barclays Capital Inc.

Presentation

Operator

Please standby. Your program is about to begin. Good day and welcome to Bally's Corp. Fourth quarter 2023 and full year earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. In order to ask a question during the session, please press the star followed by the number one on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star then zero. I'd now like to turn the call over to Charlie Yang, Senior Vice President and Treasurer for balance. Please go ahead.

Charlie Diao

Good afternoon, and thank you for joining us on today's call. The earnings release and presentation that accompanies this call are available in the Investor Relations section of our website at www.Salix.com. With me today are our Chief Executive Officer, Robson re-use, our President, George Pamprin, near our CFO, Marcus Glauber, and our Vice Chairman of the Board, Jaimin itself.
Before we begin we would like to remind everyone that comments made by management today will contain forward looking statements. These forward looking statements include plans, expectations, estimates and projections.
That's involve significant risks and uncertainties. These risks are discussed in the Company's earnings release and SEC filings. Financial results may differ materially from the results discussed in these forward-looking statements.
In addition, during today's call, management will refer to certain non-GAAP financial measures. Reconciliations to the most comparable GAAP financial measures are included in the schedules contained in our earnings release, which do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project nonrecurrent expenses and one-time costs. This call is also being broadcast live on our investors' website and will be available for replay shortly after the completion of this call, let me hand the call over to Robison.

Robeson Reeves

Thank you, Charlie. I'm pleased to share our thoughts on Valley's solid fourth quarter and 2023 operating performance as well as our strong forward growth prospects. And fourth quarter revenues grew a robust 6% year over year, reaching $612 million with increases across all three of our operating segments. Casino as a result, achieved 7% revenue increase and maintained strong adjusted EBITDAR margins as we successfully offset ramp-up costs in Chicago and warning about trump cards.
International interactive continued its solid performance, driven once again by our leading market presence in the UK. The North American interactive segment gained additional gaming market share while the rollout of Bally bet, our steady progress. For the full year 2023, our revenues and adjusted [EBITDA] both increased an impressive 9%.
As we turn the page to 2024. I'm excited to share with you our vision for Bally's future, including continued operating performance improvements and our road map of unparalleled development opportunities. George and Marcus will follow and dive deeper into the specifics of our quarterly performance regarding our vision, some of the belief that values diversity makes for a complex story. However, we view our core business through a lens of high confidence saying that there's a source of opportunity and strength. This distinguishes us within the industry and allows us to successfully navigate various macroenvironment for our equity and credit stakeholders filings, operations across casinos and resorts.
International interactive North America interactive offers unique and unparalleled long-term growth potential, coupled with our consistently strong adjusted [EBITDA] performance and the thoughtful staged development pipeline were crafted a bright future and setting new industry standards. As adjusted EBITDAR is a crucial measure for assessing our financial health, the strength of our adjusted [EBITDA] generation and enables us to reinvest in our properties and the valuable pipeline.
Moving to our development pipeline, let's first touch on Chicago. As at the beginning of 2024 and temporary facilities fully operational with a full quarter of financial performance or higher properties began operating Well George laid out during our last earnings call, which he'll update you on in a few moments. As the permit looked in line with previous time lines we've shared we remain set taxes, the Chicago Tribune site late this summer, aligned for demolition and site preparation in the second half of 2024 with completion of the facility coming late in the third quarter of 2026, reflecting this time line, there's just over 1.1 billion remaining hard construction costs per share of HCA that will be concentrated in 2025 and 2026. We're also very close to securing the incremental construction financing needed for the permanent facility. In addition to the existing 300 million Lendlease improvement facility, we expect to share updates on this important proposal soon.
In Las Vegas, the formal closure of the Tropicana on April second will pave the way for the demolition of the casino hotel of the coming months with the support of our financing partner, GLPI following demolition site prep and approval of affordable plans, construction of the Las Vegas, a stadium will likely begin sometime thereafter. We continue to assess our available options for the very valuable development lands next to the stadium. If I look in New York, we're in the early stages of what will be a lengthy multifaceted journey towards building a world-class superregional casino entertainment complex and the growth of Bally's Golf Links very points securing the licenses. The first that should we achieve this milestone, we believe will have a highly attractive and competitive proposal that will allow for numerous pathways to actualize I-vation thinking about development time lines in this way, makes it clear that Salix has a well-developed started spending time line that extends approximately five to 10 years. This approach will maximize the benefits derived from the cash flow generated from kind of core operations while accommodating for potential market and financial position shifts. Moreover, this unmatched development pipeline offers opportunity in two of the largest U.S. cities for the country's most distinguished again destination.
Finally, before I turn the call to George, I want to touch on that interactive segment within international indirect because our UK operations continue to excel with fourth quarter means we have strongest adjusted EBITDA performance to date. This success is attributed to our increased customer acquisition efficiency and refined smartbooks strategies which have significantly improved our gross profit margins. Additionally, the segment, which is benefiting from our strategic reorganization and diligent cost management efforts in Asia, we've seen our business stabilize, expect more consistent performance and cash flow in the North American interactive segment. We are pleased with our ongoing progress to refine our strategic approach to the market, and I know delivered its best quarterly revenues, your 2023, benefiting from a solid New Jersey and Pennsylvania gathering results, along with the rollout, the valley that is to say it's now live in seven states we continue to optimize our marketing investments and expect to further benefit in 2024 as we transition more functionality for our technology partner with Cambium more effectively, we have launched web-based versions of our apps. Recently, we eagerly await the launch of idea in a home state of Rhode Island later in the first quarter with Bally, we'll be the sole provider for modeling purposes on 2023, fourth quarter, and I performance should not be directly projected across the entirety of 2024. We'll continue to invest, improved leverage, resulting in an anticipated adjusted EBITDAR loss of approximately $30 million 2024 market expansions inherently involve significant initial investments, but our strategy is to allocate resources wisely to nurture this vital segment this is an exciting time for our interactive business, and that commitment is underscored by our conviction that OSP is a foundational step towards successful identifying features, and I'll now pass the discussion to George for further details on our operational performance over the last QUARTER.

George Papanier

Thanks, frozen. Begin my commentary with insights from our casinos and resorts segment for dialing into the latest developments of the Chicago temporary facility and our continued efforts to ramp up this operations at our resorts exhibited robust performance across most of our portfolio, with revenues up 7% for the fourth quarter and up 11% for the year. Adjusted EBITDAR was up an impressive [8%] for the year. Notably, our two Rhode Island properties have consistently produced strong results in 2023.
Similarly, our Kansas City property has seen robust business following the completion of its phased development in mid-September, 2023. Quad Cities is also performing well and we're quite pleased with the full year performance. Our exiting for the year ACV outperformed expectations despite a hypercompetitive environment and have generated high single digit millions of adjusted EBITDAR. Our first full year of profits. Since acquiring the property sitting, we outperform market-wide GGR comparisons on a same-store basis in 7 of our 10 markets metric. We closely monitor as it reflects the underlying strength of our properties and our consistent ability to capture market share. Operationally, we have proactive assessing every aspect of our properties and striving for cost reductions and enhanced efficiencies. It's critical to remember that our properties portfolio across 10 markets was assembled in under three years, meaning that we're relatively early in the process of managing it as a cohesive portfolio. Moreover, our resources and management expertise positions us well to drive ongoing operating improvements throughout the portfolio as we've demonstrated by our operating results over the last several quarters, thinking let's shift our focus to Chicago since opening the Chicago facility in September for dedicated property team has made commendable efforts to improve operations and advance towards our desired operational pace, including the build-out of a robust database. As we've noted before, we are several months behind our initial ramp of schedule due to factors such as delaying opening restricting operating hours at launch. The absence of valet parking and limited F&B offerings. We're actively addressing these opportunities for improvement, and we've already seen success with several of them. We initiated 24/7 operations in December 27, and are responding to demand for shuttle bus services and the facility from neighboring communities. We've also expanded parking options for our guests across numerous local garages, significantly enhancing their arrival experience and access to the property. Our team is now focused on adding the new high-limit and DIT. lounge and upgrading our hospitality offerings, including partnerships with local dining establishments and outlets to integrate Valley's constant currency, thereby reaching our guests rewards beyond mere free play. These enhancements are evident in the monthly numbers released by the IGT. We had a record exceeding $10 million in GGR in January were $9.3 million in AGR as the IGP reports representing a [9.1] month over month improvement despite severe weather conditions and compared to all other competitors we sold through saw declines versus December. We expect this to continue to ramp each month as we move into the second quarter before we begin getting normalized revenue production rates and benefit from a welcome respite from the Chicago's famous winters.
Before passing the call to Marcus, we are fully dedicated to our partnership with the City of Chicago and are extremely excited about our permanent casino development projects. We are here to stay. Second, we received approval from the city for revised construction by any due to the unexpected discovery of water pipes for these two sites. Our revised plan includes the construction of approximately 100 hotel rooms above the casino in the initial phase with the additional 400 rooms and relocated hotel tower planned for a subsequent phase. This adjustment has not impacted. Our development time line remain in accordance with the HC. that Lastly, as with many of our peers. We were impacted by severe weather across our portfolio in January, but we have seen a return to more normal seasonal trends in the past few weeks.
Further water, please remember that the Tropicana will close on April second and had an impact on revenues, income contributions beginning in the second quarter. With that now let me turn call over to Marcus

Marcus Glover

Thanks, George Robson, George highlighted and as our results demonstrate 2023 finished on a very strong note heading into 2024. The foundational elements are in place to drive sustained growth across our three operating segments. Our casino, our resource portfolio demonstrated solid top line results, characterized by year-over-year organic growth across our portfolio, which helped offset the ongoing wind-down of Tropicana. The segment reported revenues of $342.3 million, a 7% year on year increase and $94.7 million of adjusted EBITDAR, including a full quarter's contribution from the Chicago 10. Excluding Atlantic City, Tropicana and Chicago, EBITDAR margins were a solid 34%, including Beach properties EBITDAR margins were 28% for the full year casino resorts revenues increased by 11% and adjusted EBITDAR grew by 8%, driven by strength in Rhode Island, Kansas City, Blackhawk and Quad Cities
For the fourth quarter international interactive continued its impressive performance with revenues increasing 2.1% year on year to $236 million. The revenue strength was led by our leading UK business where revenues rose 10% year on year on a US dollar basis and 5% in constant currency. International interactive generated record adjusted EBITDAR of $93.2 million this quarter, a 4.3% increase year on year. Importantly, we began to see stabilization in Asia, a trend that has continued into 2024.
For the full year international interactive revenues increased by 2.8% and adjusted EBITDAR grew by 6.8%. For the fourth quarter, North America interactive generated revenue of $33.4 million, a 27% year-over-year increase. The segment generated an adjusted EBITDAR loss of $9.8 million as we continued the rollout of Bally bet which finished the year live in seven states. We expect full year adjusted EBITDAR to improve significantly as marketing efforts will remain measured given our view of OSB. as a funnel for our gaming growth. As we announced in our last call, we have identified additional ways to mitigate costs, and we'll be consolidating our domestic BAM onto the VIA platform for gaming in OSB. once Rhode Island launches. This will undoubtedly also lead to a better user experience.
With that in mind, we are estimating in North America interactive adjusted EBITDAR loss of $30 million for the full year of 2024. The biggest potential swing factors in term of pace in terms of pace to profitability are highly anticipated launch of a game in Rhode Island, which remains on schedule for March first and any additional space that may legalize gaming in 2024 2025. For the end of the quarter, shares outstanding were approximately [40 million], reflecting the repurchase of 5.8 million value shares on the open market for total consideration of $68.6 million. We also have incremental warrants options and other dilution of approximately 12 million shares. 52 million shares outstanding is the fully diluted share count. We ended the quarter with $163.2 million of cash on our balance sheet and [3.56 billion] of net debt.
Turning to guidance, Valley's expects to generate 2024 revenue in the range of $2.5 billion to $2.7 billion for the Company also expects to generate 2020 for adjusted EBITDAR of $655 million to $695 million we continue to keep a close eye on consumer spending patterns and general economic conditions or impacts to our casino and resorts customers. Also, while January was impacted by severe weather across most of the US, we are seeing an improvement in trends over the past several weeks. Our guidance also assumes the closure of Tropicana on April second, a strong Chicago run rate [EBITDAR] trajectory in the second half 2020 for continued growth in international interactive and approximately $30 million of adjusted EBITDAR losses in North America interactive.
We expect straight-line GAAP rent expense of $126 million and cash rent of $121 million or 2024. Capital expenditure guidance of $165 million in aggregate and included in our capital expenditure guidance is spending in Chicago for site prep and demolition for the permanent casino, as well as similar expenses for Tropicana.
In closing, I want to reiterate my enthusiasm for 2024, which will include the continued ramp of our Chicago, Tim, the successful launch by Damian, Rhode Island and progress on the other growth initiatives, which are underway.
That concludes my comments. We will now open up the call for Q&A.

Question and Answer Session

Operator

Apologies for the delay at this time. If you'd like to ask a question, please press the star and one on your telephone keypad. Keep in mind, you may remove yourself from the question queue at any time by pressing star and two. Again, if you'd like to ask a question, please press star and one. Now we'll take our first question from Barry Jonas with Truist Securities. Please go ahead. Your line is open.

Barry Jonas

And yes, it's literally, how do you want to start with Chicago? The temp looks like it's starting to ramp on a month-over-month basis. Curious what kind of player you're seeing there and how do you think that center database could transfer to the permanent once completed?

George Papanier

They've averaged storage of the fed by some. So obviously on we're increasing database, we started with 0 and within six months, roughly 65,000 in our database. We really just started actively mailing to that database in November after we got IGB approval. So we've only been at it for a Yeah, a couple of months now what we're seeing right now is it them a demographic that's kind of slightly skewed towards a younger demographic, primarily driven by table games you've probably seen that we were already ranked second in the state from a table games perspective. So got a lot of work to do on the slot side. What we're seeing is a little bit younger customer on the slot side as well. We think a lot of that has to do with some providing the appropriate provisions for parking, which we now have contractual arrangements with several of the garages within now within within a couple of blocks of us. So we're starting to see a lot of increases from that. We also have increased shallow blessing in the vicinity, and we're starting to see growth in that as well. So I think the goal really is to build that this database and absolutely transfer 100% of that to the permanent facility. So we're really happy about the growth short term and week-over-week. We're continuing to see all the metrics that we measure our success with the increasing. So we've gone from $6.8 million in September of volume of iGB to almost $10 million. So we're happy about the oh, we're happy about what we're seeing we're getting a little bit more aggressive from an advertising perspective in the market as well. And we're hoping to see some some real real growth in March, which is typically when you see that growth in the market and continuing that through the summer months.

Barry Jonas

Great,. And then just shifting to Trop, we haven't heard a lot just yet about what a stadium will ultimately look like Wondering if you have any better visibility and if you could talk about some of the scenarios you're considering for Tropicana. Thank you.

George Papanier

Yes, I'll take that again, Barry. So listen, we announced closure on the just on the second that we have announced closure just towards the end of January that we're closing on April second. Obviously, that that we did that in order to put us in a position to deliver construction ready site, the A's, which is with which is within our contractual arrangement with them and their goal is to open for season 2028 and Hayes. The A's are still finalizing their stadium fans, and we just continue to evaluate our options for what we feel is a very valuable development land that's next to the stadium. So from that, we don't have anything further from our perspective.

Barry Jonas

Got it.
Great.
And if I could just sneak in one more the I wanted to ask about the '24 guidance for casinos and resorts.

Marcus Glover

Can you maybe quantify the weather impact in January? Or I'll share any maybe additional underlying assumptions say what base same-store EBITDAR growth you're expecting, if that sort of flattish, but any additional color there, I think would be helpful.

George Papanier

So let me take a little bit of a step back. We yes, we continue. We continue to see growth throughout 2023 on our higher tier customer across our portfolio. But we did like everyone else experienced market softness during the back half of 2023 and oh, and by the way, during that period, we actually saw market improvement from our perspective in 10 of our 13th markets that we compete in. So we saw we saw some real on it will impact in October, a lot of softening, but then we got a nice balanced bounce back in December. And then of course, we ran into the weather, which is really what your question is that impacted us is like you've seen the impact. And now most of the regional most of the regional operators, Las Vegas really was not impacted, obviously, but to quantify it, we probably it was probably about a 20% impact on us. You'll probably see that translated into a into the top line revenue numbers, but you obviously were able to mitigate that at the at the EBITDA line. But just as a follow on. We're seeing on whether that's kind of more back to normal normal weather patterns in February and right away, we bounced back in now. We feel that we're back to a we're back to normal kind of inflationary good growth levels.
The other the other point I'm going to make is that from a guidance perspective, last year, I just talked about the softness we had in the second half. We think that's an opportunity in the second half of this year since that comps going to be a little a little easier to sell me.

Barry Jonas

Great.
All right.
Thank you so much, George.

George Papanier

Welcome, Barry.

Operator

Jeff tantial, Stifel.

Jeff Stantial

Hey metric.
And Ron, thanks for taking our questions. Maybe starting off here on the international and interactive business real estate, can you just update us with the latest with respect to the UK regulatory overhaul. What are you hearing with respect to some of the more impactful categories of proposed changes, whether that's the affordability check, the stake limits? What have you and then in the past you talked to or guided a low single digit top line impact of the worst. Have your views on that changed at all since as more parameters are our clarify.

Robeson Reeves

Thanks, Jeff. On So just on the white paper overall, we're working very closely with the Gambling Commission and the DCMS, the government body linked to those areas at the papers still progressing slowly. I'm I feel very comfortable with every discussion that we're having. It's rational with a genuine focus on protecting the consumer, which I care a lot about and we have been very flexible when it comes to how we operate our business. And so I'm not I'm not concerned at all about these regulatory changes. I think it makes for a better market. Even if there is a degree of displacement from any of the larger operators, this will impact much more much smaller operators more severely. So you'll pick up share that way. I think some of you may have seen headlines released today and over the past few days on our state limits, slot state limits online. So essentially the what the press is saying and I suspect to be very close to this is the under 20 fives will have a [GBP2] stake limit and over '25 will have a [GBP5] stake limit probably implemented somewhere in the My gut feel is somewhere in the July to September window. I feel good about that. All that ends up resulting in a much more sustainable play. Again, it means that greater longevity for this business model is very robust when it comes to recession and the challenges that people face. And when I look at our business performance right now in the UK.
I feel great, even if I'll just add a bit more color, even if there are any impacts, we will be rolling out sports into the UK market. And we also will be investing further in our value brand in that market.
I always take the lens and saying we are the biggest, our gaming operator in the U.K. with our sports.
This will aid the funnel.
Same principles apply to North America, the likes of the UK that so I feel good I feel good about the Company.

Jeff Stantial

Okay, great. That's really helpful.
Thank you for that.
And sticking on the international segment, can you just expand a bit more on some of your commentary with regards to what you're seeing in Japan, when you talk to stabilization, is that mostly a function of sort of the comps normalizing? Are you seeing actual uplift or kind of improvement in underlying consumer trends? Just any additional color you can offer would be helpful.

Robeson Reeves

Yes. So we were happy to be in Asia. And what we're seeing is the market sentiment from players engaging with the product, it's building back. So there's more new customers coming into the funnel and there still have in our product and engaging with it. We've added extra types of content and which has appeal to different audiences.
Yes.
So it feels like Asia stable feels like it's under control and we'll see consistent revenues from that area. As you can see in our intra international direct performance in 23. The UK was really kind of holding that thing up from hoping everything can contribute this year.

Jeff Stantial

Okay, great. And then if I could just squeeze in one more here and apologies if I missed this, but the $50 million EBITDAR target for the Chicago temporary facility, is that is that still intact? Is that what's embedded in in guidance for '24?

Marcus Glover

Yes. So to answer your question in short, yes, we are trajecting toward that. Just a moment of clarity and a couple of things as it relates to Chicago, George and team, as you guys can see, are making pretty substantial progress toward our goal. We've contemplated and driving revenues. But there are some costs that we're overcoming in that. And so to answer your question in short, yes, that contemplates hitting our run rate that we've shared in the third quarter.
That still holds true today.

Jeff Stantial

Okay.
Great.
Very helpful.
Thank you.

Operator

We'll take our next question from Jordan Bender with Citizens JMP.

Jordan Bender

Good afternoon.
I wanted to touch on Barry's question and seen our guidance of presumably trough should help the overall margin profile for that segment. So with margins guided down about 200 basis points year over year it implies that a lot of that on down year over year should happen in the first quarter. Is that fair to assume that the weather plus the ramp in Chicago or the major hits and then Q2 through Q4 should be more stable.
And then are there any run rate losses implied with Triapine close?
Yes.

Marcus Glover

So you mean tri-band close that it definitely isn't incorporated in our in our model. And what we have shared with you for guidance on weather, definitely on the first half of the year is going to impact that guidance as well. But one thing that enjoys kind of teased us a little bit, you know, we're seeing and focusing on the top end of our database and ensure that that stickiness stays in place. We are keeping a cautious eye to the lower areas of our database in the unrated segment. And so some of that free business could materialize into some some margin impact. We haven't experienced that yet, but we are contemplating that being a case as we enter some of our competitors more competitive market.

Jordan Bender

Great. And then switching to North American online last year, you kind of shifted the strategy into gaming. So as you assess your market position in some of these sports betting only markets, would you look to exit any of these states, I guess, particularly New York, we've seen what a skin price would go for in the state? Thank you.

Robeson Reeves

High, Robison and have no, we don't have any intention to leave any of these markets. We're being very measured. As we said in our marketing approach, we have got a great partnership with both Cambium White House, which has enabled us to manage the appropriate investment costs across all of these states. We do view sports as the pathway to a gaming today. We will stay in all these states. We're very focused on investing in our gaming as that's where we're achieving our greatest return.

Jordan Bender

Thank you very much.

Operator

We'll take our next question from Chad Beynon with Macquarie. Please go ahead.
Your line is open.

Chad Beynon

Afternoon and thanks for taking my question. Robinson, wanted to return to the in our international interactive segment margins in the quarter, 39%, certainly higher than I think what you had kind of talk to before and kind of where the Street was. for '24, I believe your guidance implies 33% to 35% and you kind of just talked about maybe some of the other regions hopefully picking up. But as we think about margins and just the overall marketing environment, I guess historically, you've talked about 30%, now you're 33% to 35%. Can you just kind of provide a little bit more color in terms of what on the marketing environment is like? And if this 39% in the fourth quarter should be viewed as more of an anomaly.

Robeson Reeves

So touching on Q4, our view that this is an anomaly, the 33% to 35% range that we discussed allows us to ensure that we can continue to invest. We can continue to look at other ways to grow so that there's some room in that to test. And if you're not testing, you can never actually always find stable growth?
Yes, margins should be holding exactly the I feel good about our plans. We're going to go above the line with both Bally's and Virgin in the UK. We definitely within that we have expansion in Brazil. We're looking at other markets to on the tool in a locker that we haven't unlocked over the past few years is looking at wider market expansion outside of North America contracted and running at these margins, which I know are very sustainable because we retain our customers so well allows us you look at expansion opportunities.

Chad Beynon

Okay, great. Thanks. Great to see that in terms of capital returns, you repurchased $70 million worth of stock in the quarter. So nice to see you're being opportunistic there. for '24 CapEx is still reasonably low. I believe it picks up in '25 and '26 with Chicago So how should we think about capital returns? I know you have some, I believe, $95 million left on the current program. Do you have the availability to be opportunistic in the market if shares remain depressed.

Charlie Diao

And this is a Charlie deal speaking. I think that what we've always said is that we allocate capital among different opportunities, internal investment development as well as Phil, obviously, returning capital at any point in time. The dynamics of each of those up options still may change to the point being. We do have significant development expenditures, we expect to get some financing for those development expenditures and at different points, we'll see where the stock is. And if it makes sense, we'll exercise that the Board will exercise that.

Chad Beynon

Yes.
Thanks, Charlie.
Appreciate it.

Operator

And as a reminder, if you'd like to ask a question today, please press the star and one key on your telephone keypad. We'll take our next question from Jonathan Ruykhaver with TD Cowen. Please go ahead. Your line is open.

Jonnathan Navarrete

Hey, why you guys have started on finance and wanted to touch on international and any insight into the state of the UK consumer so far in 2024?

Robeson Reeves

Hi, Jonathan Bradson here. And with respect to UK consumer, we're seeing very stable spending patterns from our players. We don't have very many big players, right?
So it's very much consistent consumer.
We're getting high enough volumes of new customers into the funnel, and we have enough levers to pull such as hold, such as on the content mix and everything else to ensure that we can manage the returns from our investments that so we're not seeing a slowdown there is definitely the usual sort of January post Christmas pause, but we understood that and I'm in all of our numbers and that happens every single year. We've seen good trends through the end of January and into February as expected?

Jonnathan Navarrete

Yes, I feel very comfortable about the consumer in the UK in terms of CapEx equal to $165 million Can we just get the split of maintenance versus growth?

Marcus Glover

Yes, about I think I think of it this way, there's about probably $65 million, $70 million that will go to on maintenance for the casino resort side, we have some growth that's probably in the neighborhood of $35 million , so $40 million of capital that will go to the properties, but probably will not see the ROI on that into 2025. So we'll activate and develop this year and bring online for '25, a significant portion for continued development and investment in our development efforts for Interactive. That includes both North America and some international interactive and then a very, very small portion for some enabling technology.
Fourth, our centralization and integration efforts across the enterprise.

Jonnathan Navarrete

Understood.
Thanks.
And you also called out demolition cost, that's not including CapEx. And I'm just wondering what is that figure like is it substantial or is that somewhat insignificant that you want me to comment on

Marcus Glover

we separate out now I'll let George add anything on to it if he has anything off and we separate out our development capital from what we share in that $165 million . So Chicago and Tropicana are separate. I won't give you. We're still going through the process now of working with our contractors to understand what those demolition costs will look like. So we don't have a number to share with you today, but those are separated out from that $165 million and and and and are not included in that number that we published.
I don't know if George has anything else to offer .

George Papanier

your rate. We're going through the of the bid process right now in both Chicago and the truck count.

Charlie Diao

I think the other issue is that as it relates to I mean, it's just not the demolition of blowing it up at site prep and over some period of time. So that bit really fixing it on a particular calendar year.
Some of that's going to wrap over like trough, maybe wrap over '25. So so that's no reason why we we don't have specific guidance held to a certain timeframe.

Jonnathan Navarrete

Sure.
Thanks, ARM.
And the last one, can you just remind us where we are with the new license?
I know it's a competitive process and just we're barely stands at the moment.

George Papanier

Yes. Yes.
So yes, so we will back to it. Obviously, it's public that we're part of the process we're working. We're working on presenting an appropriate plan once the RFP process begins on. We've secured the land. And we think that there's that's a real a real opportunity at state. We think that the I didn't think that anyone that does project will be successful and living with it, putting ourselves in a position to be to build the appropriate private there and be successful. But the first step is acquiring a license.

Marcus Glover

That is just because the thing is that you can see, obviously, we can't give you any color on New York's time line. We are taking every step measure that will put our name and they have for consideration and so on.
We're very interested in and we think we have a very, very compelling proposition and site anchored by our Valley links golf course.
And so we are a we will engage and await New York's decision and time line

Jonnathan Navarrete

Thank you.
Yes.

Operator

We'll take our next question from David Katz with Jefferies. Please go ahead, your line is open.

David Katz

And I agree with everyone. Thanks for taking my question on And apologies.
I was a couple of minutes late, but I wanted to just go back on Chicago financing and which I know is still an open question on.
You may not have conclusions for us today, but any update on what the inbounds are out of bounds as potential outcomes would be helpful.

Charlie Diao

David, this is Charlie. Yes, I think we haven't changed it kind of we expect to finance it when we need to have the financing. The I know that the market would like to have greater certainty, but the fact is we don't get access to the site until July for 2024. And we're going to run the back half of this year, abolishing and and site prep. So as a ropes, I mentioned in the introductory, the bulk of the CapEx is in 2025 and 2026. So unfortunately, we don't have a commitment in place and tell you about what been. And when we do, we still do that. But we continue to progress towards that outcome. And we are and I'm confident of our ability to finance project because it's a great project.

David Katz

Okay. We'll we'll we'll have to leave it there.
I appreciate it.
Thank you.

Operator

We'll take our next question from Brandt Montour with Barclays. Please go ahead.

Brandt Montour

Your line is open and say good evening, everybody. Thanks for taking my question. I wanted to circle back on the international interactive segment guidance and which is which is essentially flat on the top line right for 24. And I just I guess if I'm just trying to read between the lines here on the different segments. It sounds like you're constructive on the UK, which I would expect to mean that you expect that part of the business to grow somewhat.
And then and then it sounds like Asia is stable, but maybe you got maybe yet to lap rates have reset there from last year. And so on a year on a year-over-year basis for the year, Asia would probably be down and maybe those two offset my wildly off there in terms of thinking about the different geographies within that line?

George Papanier

No, I think I think you've interpreted it pretty well. Asia does have to lap because there was a significant decline that over the course of 23. Now we're seeing recovery there, which is good, but we have to lap that. We obviously when we're thinking about our guidance thinking about our forecast because you can't predict perfectly in some of these environments. So we know that what we have in the is rational and we know that we have enough levers to pull marketing optimization to ensure that we have the right flow through to the bottom line yet. And we're making investments in other markets to set ourselves up for the future as well.

Brandt Montour

Got it.
That's helpful.
And then a follow-up to the capital allocation discussion. You guys gave some color on how you think of how you're thinking about it going forward.
I guess just sort of thinking or looking back in the fourth quarter, we noticed you drew down and some of your revolver and maybe it's separate, though, cash is fungible. You don't you took you bought some you bought some stock back into leverage, picked up a little bit a little bit on that. And so I guess the question is maybe just remind us your philosophy on your leverage where it went and when it sort of is at a level where it doesn't make sense for the stock price to buy back stock and sort of how you think about how you think about that?

Charlie Diao

Yes, I would look at any point this Charlie young, any point in time. We have different options. And certainly in the fourth quarter, the equity Scott, too cheap. And but now we also have raised forms that you say our leverage. We we we do have a land bank of that deal we made. We know that we can monetize at any point in time. That doesn't necessarily mean that we're going to monetize it and then buy stock or do other things with it. So those are levers that are available to us. At the end of the day, we only spent less than $70 million, that's [0.1] of the term. So I don't know if I can that satisfies you, but the point is that that option is never off the table for us, but it doesn't mean that we're focused on on doing that exclusive to other opportunities available to us.

Brandt Montour

And that's helpful. I mean, I guess now that said that satisfy, I guess I'm just curious if you think it's worthwhile to sort of send a signal that you care about bringing leverage down? Or do you think that this is a this is this level you're very comfortable with and you don't need to do that.

Charlie Diao

I think we're very comfortable with our leverage. Our leverage is elevated because of significant investment in the Chicago development effort. And I think we've been in the market in the past that ultimately, as that project is completed, we expect to get all our money back and more. And so you're in a transitory period or a three year development project. And but then the denominator and numerator are not matched by. If you look at our temp, we spent $70 million and within the year. We expect that to have a $50 million per annum return granted as a temporary, but feel that's a very high return on capital. But obviously, we had the Biden license and other things associated with it that will ultimately be used for the permitted. So we don't look at things as a point in time, but over a period of time that help.

Brandt Montour

That's crystal clear.
Thanks for that.

Operator

And this does conclude the Q&A session. I'll now turn the program back to our speakers for any closing comments.

Robeson Reeves

Okay. Thank you. Thank you all for joining us on, I think we should all just remember, we have an exceptionally robust core to our business and we're handling our development pipeline with cap, right? We see a huge opportunity ahead, but we really want to deliver value for our stakeholders and look forward to sharing much more of you very soon on.
So I'll speak to in the next quarter.
Thank you for Joining.

Operator

This does conclude today's call.
Thank you for your participation and you may now disconnect.