Good day, ladies and gentlemen, and welcome to the Churchill Downs Incorporated 2023 fourth quarter and year-end earnings conference call. At this time, all participants are in a listen-only mode. Later, we'll conduct a Q&A session, and instructions will be given at that time. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Phil Forbis, Vice President, Financial Planning and Analysis and Treasury. Thank you, Andrew. Good morning, and welcome to our fourth quarter and year-end 2023 earnings conference call. After the company's prepared remarks, we will open the call for your questions. The company's 2023 fourth quarter and year-end business results were released yesterday afternoon. A copy of this release announcing results and other financial and statistical information about the period to be presented in this conference call, including information required by Regulation G, is available at the section of the company's website titled News, located at churchilldownsincorporated.com, as well as in the website's investor section. Before we get started, I would like to remind you that some of the statements that we make today may include forward-looking statements. These statements involve a number of risks and uncertainties that could cause actual results to differ materially. All forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC, specifically the most recent report on Form 10-K. Any forward-looking statements that we make are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in yesterday's earnings press release. The press release and Form 10-K are available on our website at churchilldownsincorporated.com. And now, I'll turn the call over to our Chief Executive Officer, Mr. Bill Carstanjen. Thanks, Phil. Good morning, everyone. With me today are several members of our team, including Bill Mudd, our President and Chief Operating Officer, Marcia Dall, our Chief Financial Officer, and Brad Blackwell, our General Counsel. I'll share some high-level thoughts on several strategic topics, and then Marcia will provide insight on our financial results, as well as an update on our capital management strategy. After she finishes, we will take your questions. 2023 was a very strong year for Churchill Downs. We grew our company substantially, accomplished a number of key strategic and operational objectives, and positioned the company for exceptional growth in 2024 and beyond. We delivered record net revenue of nearly $2.5 billion, and record adjusted EBITDA of over $1 billion. I'll touch on a few highlights for 2023 but then turn quickly to 2024 to focus on why this year is going to be a pivotal year for growth and for positioning our company for the next several years. Beginning with the highlights of 2023. In May, we held a very successful Kentucky Derby, setting once again, records for virtually every material metric. We expanded our HRM business in Kentucky with the new hotel, sports book, and gaming floor expansion at Derby City Gaming, and the opening of Derby City Gaming Downtown. We expanded our HRM business in Virginia with the opening of the Rosie's Gaming Emporium in Southern Virginia. We completed the strategic acquisition of Exacta Systems. We launched our TwinSpires B2B business with FanDuel and DraftKings. We completed the sale of our Arlington Heights property in Illinois to the Chicago Bears, and we have several significant strategic organic investments in process that will accelerate our future growth. Even with all of these initiatives, we still maintain one of the strongest balance sheets in the industry. With another record year behind us, let's discuss our objectives for 2024 and beyond. While the gaming industry was impacted in January by volatile cold weather, we are not concerned about that, and our financial results will accelerate in the second quarter and through the first half of next year as we open a number of new properties. In early April, we will celebrate the opening of the Terre Haute Casino gaming floor in Indiana, our greenfield development that will have 1,000 slots and 34 table games. On the first Saturday in May, we will host the highly anticipated 150th Kentucky Derby. We will introduce the reimagined world-c lass Paddock and renovated Jockey Club Suites. $200 million of exciting investments for our guests, that we believe will drive energy and engagement for years to come. The hotel at our Terre Haute Casino Resort will open a short few weeks later in mid-May. Then towards the end of September, we will open The Rose Gaming Resort in Northern Virginia. I will share more on this in a few moments. In early 2025, we plan to open the Owensboro Racing and Gaming facility in Western Kentucky, and finally, we plan to also open our expanded HRM Entertainment facility in New Hampshire in 2025. Beyond these announced projects, we are focused on growing in 2025 and beyond as we execute the next level of our growth strategy. We expect this to include expanding the Kentucky Derby, expanding HRMs in Virginia, creating an additional gaming property associated with our Oak Grove license in Kentucky. As you may recall, each racetrack license has the right to build an additional facility within 60 mi, expanding the footprint of our Exacta business, growing our B2C and B2B TwinSpires business, and identifying disciplined acquisitions. We have a strong initial pipeline of growth opportunities beyond the ones we have announced. Now, let's discuss a few strategic updates since our last earnings call. First, we are preparing for the Kentucky Derby, which is in about 70 days. The reimagined paddock and related seating areas will deliver a series of unique and spectacular hospitality experiences. The Paddock Club will offer luxurious accommodations directly next to and overlooking the paddock and will include the opportunity to walk through a private tunnel from the seating area into the paddock for an up-close view of the horses, followed by the chance to walk out to the track to watch the races from the rail. The n ew Sports Illustrated or SI Club, offers a similarly exclusive experience with views of the paddock and a celebrity and sports-themed hospitality environment, as well as access to watch the races from the rail. In addition to these two new entertainment options, there are numerous additional seating areas with fantastic views of the paddock. This transformative project will reinvent Churchill Downs Racetrack in a way that will touch every one of our front side customers, regardless of where they are seated. We remain on budget, and we expect to be completed prior to the end of April, just in time for Derby Week. This is a testament to our team's experience and ability to deliver highly impactful capital projects that drive increases in the profitability of the Kentucky Derby. This is the most significant undertaking at the track that I've seen in my nearly 20 years with the company, and I'm pleased to tell you that there is much more we plan to do in the future to grow our iconic events. We remain significantly ahead of the pace of any previous year for Derby ticket sales, both with respect to the dollars earned from sales and the percentages of inventory already sold. Turning to our HRM entertainment venues in Kentucky, we opened Derby City Gaming Downtown, our sixth Kentucky HRM venue, at the beginning of December. This facility is focused on capturing the downtown Louisville market, driven by the adjacent convention center, downtown sporting, concerts, and other events, bourbon tourism, and urban residents. We expect the performance to accelerate as we get closer to springtime, when conventions, urban events, and bourbon tourism traditionally increase in the downtown area. We've begun construction of our seventh Kentucky HRM venue on a 20-acre site just east of Owensboro. This is in a growing area of the region, located directly adjacent to Route 60, a busy highway surrounding Owensboro, which has seen significant road improvements and commercial development over the last number of years. We plan to open the venue in the first quarter of 2025, with a total spend of $100 million. Turning to our HRM venues in Virginia, we are making great progress on The Rose, which is located right off Interstate 95 in the town of Dumfries, 30 mi south of Washington, D.C., in Northern Virginia. Last week, we received approval from the town to increase the number of HRMs as part of Phase One, and we will now open the facility with 1,650 HRMs instead of 1,150. Phase One will have a 100-room hotel, several bars and restaurants, and over 2,540 parking spaces. This has not changed. For the time being, we will keep open our existing HRM location in Dumfries with 150 machines. We are pleased to be making a $3.6 million one-time contribution to the town as an incentive for this increase in the number of Phase One games. We will also be making a $200 million-- a $2 million one-time contribution to the town to support the design of a new community center. We anticipate opening The Rose in late September, a couple of months later than previously communicated. This will provide additional time for the construction team to finish the build-out to accommodate the additional machines and to finish the extensive access roadwork to our parking structure. The roadway has taken longer than expected because of some construction challenges and a very wet winter weather environment. We now expect to invest a total of $460 million on Phase One of this project, of which only $160 million remains to be spent. Although we are opening a bit later than we had originally planned, our team has done a masterful job addressing construction challenges, and we are also very pleased to be in a position to maximize the number of HRMs in Phase One. Given this facility's location in the Northern Virginia, Washington, D.C. market, with nearly 6.5 million people, and the limited other gaming options in the region, we wanted to maximize the number of machines available for our customers as quickly as possible. Our goal is to utilize all 10 of our potential Virginia HRM licenses and deploy all 5,000 HRM machines currently permitted under the law. With the increase in HRMs at The Rose, we will have approximately 4,440 HRMs operational across the Commonwealth of Virginia by the end of the third quarter of 2024, up from 2,790 at the end of 2023. As our performance over time has demonstrated, our disciplined approach to our HRM investments has led to an excellent return on capital, and we will remain disciplined as we look to expand further in each of our key markets. Turning to our TwinSpires segment. In August of 2023, we completed the acquisition of Exacta Systems, which has driven material efficiencies in our HRM operations. The Exacta team has continued to make strides growing the portfolio of third-party HRM operations in Kentucky, Wyoming, and New Hampshire. We are extremely pleased with this acquisition and our new team. We have high expectations for this group as the HRM product improves and new jurisdictions consider offering this form of wagering. We have been working to better diversify the games at our HRM venues in Virginia, as well as in Kentucky. We believe this will improve our top line and our margins. As we mentioned during our last call, we are also pursuing the development of HRM-based electronic table games. We have made progress with our team and partners, and we intend to work with regulators within the legal and regulatory parameters in each jurisdiction to get them deployed when the games are ready and permitted. We also successfully launched our TwinSpires B2B business in 2023. Our B2B strategy is focused on integrating pari-mutuel wagering on horse racing directly into the online sports wagering platforms through our suite of technology and operational capabilities. Our deals with FanDuel and DraftKings are still in their early stages. This year's Kentucky Derby will be a nice test of our progress, and we are planning to expand our B2B business to other online sports wagering platforms in the future. As I have said previously, we believe pari-mutuel wagering offers predictable and high margins to sports wagering platforms, and our goal is to service their pari-mutuel demand as the sports platforms become more familiar with and focused on horse racing and higher, more predictable margins. Turning to our gaming segment, as I mentioned earlier, we are planning our grand opening for our Terre Haute Casino in Indiana in early April, with the 122-room hotel opening in mid-May. Construction is progressing well and remains on budget. We've built our property team and are focused on executing a smooth opening and rolling out our initial marketing strategy. With the Terre Haute Casino, we will have 10 wholly owned regional casinos and two equity investments in high-quality regional casinos across 11 states. This provides us increasing scale and the ability to leverage operational efficiencies across our properties. We also continue to own our underlying real estate, unlike many of the other gaming companies. In summary, 2023 was a tremendous year for our company, with record financial results, which is particularly noteworthy given the challenging macroeconomic environment that developed starting in the second quarter of last year. We are now well-positioned for ongoing growth in the next year and beyond, fueled by organic investments in Churchill Downs Racetrack, our HRM projects in Virginia, Kentucky, and New Hampshire, and our Terre Haute Casino in Indiana. One core skill we have demonstrated over time is our ability to build a pipeline of growth opportunities, and I believe that remains as strong a core competency as ever. We have also demonstrated that we can effectively integrate transformative acquisitions, such as P2E and Exacta Systems, while also executing on numerous growth initiatives across our portfolio. We believe there are many growth opportunities to pursue in the coming years, whether it be further investment in our flagship asset, the Kentucky Derby, our new investments aligned with our long-term strategic plans. I'm excited about the growth projects we have discussed today, as well as those to come in the future. We believe our growth plans will drive a material increase in adjusted EBITDA and Free Cash Flow in the coming years, while we maintain one of the best balance sheets in the industry. We will keep delivering for our shareholders. With that, I'll turn the call over to Marcia, and then we will take your questions after that. Marcia? Thanks, Bill, and good morning, everyone. As Bill shared, 2023 was another record year for our company. Excluding 2020, our team has delivered seven years in a row of record revenue and record adjusted EBITDA from continuing operations. We also delivered record fourth quarter net revenue and record fourth quarter adjusted EBITDA for the overall company and across all three of our reporting segments. Today, I'll start with a few insights on these financial results and provide some initial thoughts on 2024. I will then provide an update on capital management. First, regarding 2023 financial results, the acquisition of the P2E assets in Virginia, New York, and Iowa clearly created step function growth in our financials, generating nearly 27% of our $1 billion of adjusted EBITDA in 2023. We also generated record adjusted EBITDA from our Kentucky HRM properties, driven by the strong performance of our Derby City Gaming and Oak Grove properties, and the first full year of operations at Turfway Park. Churchill Downs Racetrack also delivered record adjusted EBITDA as a result of a very successful Derby Week. The addition of the First T urn Experience and increases in ticketing, sponsorships, and pari-mutuel wagering provided a significant lift to our financial results while maintaining the consistently superior margins that Churchill Downs Racetrack has generated over the years. We expect Churchill Downs Racetrack to deliver step function growth and adjusted EBITDA in 2024, given the addition of the Paddock project and other economics associated with the 150th Kentucky Derby. In our TwinSpires segment, we grew adjusted EBITDA by $80 million compared to the prior year because of two disciplined strategies. First, we benefited from the final stages of the exit from online sports and casino business, and the pivot into the B2B for online wagering on horse racing. The pivot into B2B for online wagering on horse racing helped to partially offset a slight decline in retail wagering, higher content-related expenses, and higher ADW taxes. There were a significant number of race day cancellations and shifts in race schedules in 2023, which impacted retail wagering. Overall, we remain pleased with the strong margins this business generates, despite facing industry headwinds in 2023. Although January racing has been impacted by some extremely cold weather conditions, we're hopeful that industry-wide horse racing handle will stabilize in 2024. Second, we began to realize the benefits of our strategy to vertically integrate Exacta and its HRM central determinant system technology. We acquired Exacta for $250 million in August 2023. In the fourth quarter, Exacta contributed nearly $9 million of adjusted EBITDA to the TwinSpires segment and more than $5 million of improved economics for our Virginia HRM properties. Last, regarding our gaming business, our regional gaming properties held up relatively well in 2023, despite the consumer softness across the industry. Our 2023 same-store wholly owned casino margins, excluding insurance proceeds, were down 1.6 points compared to 2022. However, our margins on the same basis were up nearly 2.5 points compared to 2019. Regarding our equity investments, both Rivers Des Plaines and Miami Valley Gaming delivered record revenue and record adjusted EBITDA in 2023. Rivers Des Plaines performed well despite competitive challenges in the Chicago market, and MVG delivered high single-digit growth in adjusted EBITDA despite a challenging economic environment. As Bill mentioned, many of our regional gaming properties were impacted in January by inclement weather, which, combined with a strong start to the year in 2023, will likely cause a difficult comparison for first quarter 2024 from a revenue and margin perspective. Despite the challenging start to the year, we are pleased with the results we have seen so far in February, and we remain optimistic for these properties for the balance of the year. Overall, we are very pleased with the results that our team delivered in 2023. As Bill discussed, we will enjoy the iconic 150th Kentucky Derby in May, and we will be layering on a series of new properties that will fuel our growth in 2024 and beyond. Turning to capital management, we generated $528 million, or $6.94 per share, Free Cash Flow in 2023, up 16% per share over the prior year, primarily from the strong cash flow generated from our businesses. Regarding maintenance capital, we spent $78 million in 2023 and expect to spend between $90 million and $105 million in 2024. The increase in maintenance capital for 2024 is driven by incremental HRM slot capital in Kentucky and Virginia, racing-related upgrades at Ellis Park, maintenance projects at Churchill Downs Racetrack in preparation for the 150th Kentucky Derby, and incremental slot capital at our regional gaming facilities. Regarding project capital, we spent $599 million in 2023 and expect to spend between $450 million and $550 million in 2024. The major components of our planned project capital in 2024, in order of largest to smallest, are The Rose HRM venue in Northern Virginia, the Terre Haute Casino and Hotel, the Churchill Downs Paddock project, and the Owensboro HRM venue. Regarding share repurchases, we repurchased approximately 151,000 shares in the fourth quarter at an average share price of approximately $119 per share under our share repurchase program. We also repurchased $1 million shares in a privately negotiated transaction with The Duchossois Group for $123.75 per share. Our disciplined approach to share repurchases reflects our belief in the long-term value of our shares. At the end of December 2023, our bank covenant net leverage was 4.0x. Based on the capital investments and the timing of our opening of our new facilities, we expect our bank covenant net leverage to remain in the 4.0x range over the coming year. We then expect our bank covenant net leverage to decline in 2025 as our investments in Kentucky, Virginia, and Indiana begin to ramp. In closing, as Bill said, 2023 was a tremendous year for our company, with record financial results, and we expect 2024 and beyond will be even better, given our unique portfolio of assets and our new projects coming online that will generate a significant amount of adjusted EBITDA and Free Cash Flow. We remain committed to creating long-term shareholder value. And with that, I'll turn the call back over to Bill so that he can open the call for questions. Bill? Thanks, Marcia. We're now ready to take your questions, so fire away. Thank you. Ladies and gentlemen, if you have a question at this time, please press star one one on your telephone. If you wish to remove yourself from the queue, please press star one one again. One moment, please. Our first question comes from the line of David Katz with Jefferies. Hi, good morning, everyone. Thanks for all the detail. Bill, what I'd love to just talk about is, you know, a lot of thoughtful capital out there, a lot of growth capital. As we move forward, specifically with the Derby and Churchill Downs Racetrack, you know, how do you-- what's your vision for kind of what's next, right? Assuming the paddock and, you know, all the capital comes online, is there, you know, more in the future of size? You know, some of us recall, you know, some seven, eight-figure investments, you know, there were super productive, or should we be thinking more in the nine-figure category? Thanks, David, and good morning. So, there's more to come with the Derby, and there are a couple significant projects that we think are possible. So our first goal is execute on this one and prove this one out, which I feel... I couldn't feel more confident about that than I do. So one thing at a time, execute on this one, take the learnings from this one, and roll them into some of the other significant projects that we've considered. This isn't the call where I reveal what those might be, and we haven't decided as a management team or with our board exactly what should come next. But I would just point out that, when you come to the Derby, David, and I hope we see you at Derby 150,... Take a look around, it's a mile oval, and you still see significant areas that could see material improvement or almost greenfield in their possibility. So, it's a big place. It's, there's lots of vantage points around the track, and we scour the world to see what the best other people have done in other parts of the world, and then we try to build on that. So more to come and significant projects to come. But, for today, the message is we're gonna deliver on this one. We're gonna make this one work for Derby 150, and then we'll roll the learnings from that into the next big one. Understood. And if I can just follow that up, and make sure we're getting the messages exactly right. You know, it does sound as though we sort of get the paddock open and maybe ramp it a little bit before, you know. And I don't think there's any debate, right, on the length of tail of growth at that asset. I was more, you know, just probing about sort of timing and magnitude, and it sounds like, you know, there may be a little bit of ramp time before we get into, you know, more heavy spending there. Is that a fair takeaway? Or we don't know yet, I guess? Yeah, so I would say that every year, we try to do something to delight our customers, and every year, we want our customers who come year-to-year to look at our facility and say, "There's something new, there's something different, there's something exciting." So that's part of the rhythm of how we approach capital expenditures. So the size of the project, we haven't made a decision on that, but you are going to see constant, consistent activity there on a basis that can be measured year-to-year. So, I don't wanna foreshadow or mislead, but we will be active in 2025. The scope of the project and the timing of the project, that's something we still have to decide based on our learnings from this Derby. But I wouldn't expect a material pause. Our team's chomping at the bit to get going on the next thing. Understood. I appreciate the clarification. Thanks so much. Thanks, David. Thank you. One moment, please, for our next question. Our next question comes from the line of Ramin Sobhany with Truist Securities. Hey, guys. Thanks for taking our question. Can you quantify the upside you have seen from the Virginia skill-based ban? We've heard some legislative movement to maybe legalize skill games in the state, and can you walk us through any risks there and how you're responding? Thanks. Sure, and good morning, Ramin. So first, the court case that led to the enforcement of the ban in Virginia happened October, November of last year, and it's still hard to quantify exactly what that meant, and that's because the enforcement process over the fourth quarter and into the first quarter has been lumpy. It requires local, local enforcement. So it's been pretty lumpy, and harder to quantify, especially when added to the operational efficiencies we're clearly demonstrating in Virginia. So, the ability to treat it as a single variable and to know for sure, can't do that yet, and that's because it wasn't a light switch. The court case didn't come down, and the next day, we woke up to complete enforcement of the ban on skill games. That's not what happened. Instead, the court case came down, and that started then a multi-month process of enforcement of closing those games across the different local jurisdictions in the state. So that's something that we're still evaluating and still understanding, and that will continue. As opposed to legislative matters, this call at this time of year is always interesting because we do this call against a backdrop of legislative sessions being active. This is the time of year where many, if not most, of the state legislatures are active in the session, and there's always bills being considered or talked about. I’ll tell you our process. Our process is always, is there a bill that has an opportunity to get passed, that might pass? What are the details of that bill? What are the, what are the risks? What are the opportunities? Is there a chance to shape that bill? Is there a chance to, mitigate a bill that has negative components? That's all part of a process that goes on this part of year, and that's why these calls during this part of year, I always have to be, respectful of those processes and focus on what we know versus what might happen. So this is, this legislative cycle, like most, involves activity in different jurisdictions, including in Virginia. And as those sort out, here's what I can tell you: Our team will evaluate those, our team will deal with those, and our team will attempt to shape those as best we can. But today's a call where we talk about what's actually happened and what we know will happen, and not speculate on what could happen in different jurisdictions. I wish I could be more precise, but I've learned over time, we've got to tell you what we know and what's happening. Drifting down lots of hypotheticals doesn't end up conveying any particular knowledge to our shareholder base. Got it. Yeah, that makes perfect sense. So, I appreciate the extra color... And just a quick follow-up on Exacta. You know, you called out the strong contribution in the quarter. How are you thinking about the synergy potential now that you've had some time to ramp that and, you know, versus when you first announced the deal? And also, what's the reception been like from the B2B perspective? Any color there would be helpful. Thank you. Yeah, sure, Ramin. So, that acquisition has gone extremely well for us. I'd start with two different components of it. One is the ability for us to just operate more efficiently at a higher margin. We integrated that business into our operations, and we took what had been a vendor cost, and we folded it into our operations, and that allows us to operate cleaner, better, more efficiently, and at a higher margin. And that's something that Marcia referenced in her comments, and that's been a great development. The second category, I would say, with respect for our own company, is our ability to better control the process to improve and develop the product. To work with more manufacturers, to control or push towards faster development that we think is more favorable in the long term for us. So it gives us the ability to implement our philosophical approach and our priorities and our areas of focus without a loss of efficiency. We now control some of these building blocks, and that's going to allow us to more effectively and quickly get to a better, more competitive product in the HRM space versus Class III traditional casinos. So that part of it is something I think we'll prove out. We're already proving it out internally, but externally, you'll see more progress on that over the coming quarters. With respect to the next part of your question, which was, we are both a consumer of Exacta services and also we have a B2B component of it. We sell those services to other people. That's a real focus for us. We care a lot about the opportunities in New Hampshire and Wyoming and Kentucky with respect to facilities that are not Churchill Downs facilities. That's a real opportunity for us. And so we're very disciplined and careful with the team to make sure that they are focused on providing the best service they can to those customers, because that's a big part of this. If you think about it, that may be a key to opening up other states for us, where we might not think we have a B2C opportunity, but there are B2B opportunities for us. The B2B component of the Exacta business model is one we take very seriously, and it's really important to us, and we're gonna continue to do it as well as we can. In terms of how have customers received us, it's been absolutely fine. We're just making sure we deliver on what they need from our business, from Exacta, from our services that we provide, and we just make sure we meet their expectations and exceed them, and everything else takes care of itself. Got it. Thanks so much. Appreciate that. Thanks, Ramin. Thank you. One moment, please, for our next question. Our next question comes from the line of Chad Beynon with Macquarie. Morning. Thanks for taking my question. Bill, wanted to ask another one on, I guess, the mid or long-term growth of the company. You guys did a nice job kind of laying it out at the onset in terms of, you know, what's already embedded in future growth. P2E, it looks like the multiple is already down under nine, and you still have some opportunities here. Exacta, based on the math that you gave us, under five. But as we think about, you know, the future of the portfolio, I'm sure there's a lot of stuff that comes across your desk, what makes the most sense in terms of growth in different segments? Is it tech? Is it gaming opportunities, racing? Anything that you, you know, would like to double down on, over the next five years? Thanks. Yeah. So first, thanks for that question, Chad. And, there's a lot there, and I appreciate that question, and I'll try to walk us through this concisely. So first, when you think about our company, always remember we have this special asset called the Kentucky Derby, and while it's 150 years old and is the oldest continuously run sporting event in the United States, in our mind, it's still a young, young property with a lot of opportunities. So that's a component of our growth story going forward. Next, this HRM development that happened in the U.S. gaming environment, that's been a great development for our company. And whether you look at our B2C properties, our actual facilities, or if you look at our technological capabilities, our technology services, you see a lot of growth there. So we like HRMs from both the perspective of being a B2C operator. We think that they're efficient uses of capital. We think we've demonstrated we know what to do in that space as a B2C operator, and there'll be opportunities there that we're executing on and perhaps more in the future. And then the transition to offering some of the technology services, I think that's just been a really important development for our company. It serves us both from the perspective of efficiency in our own operations, but also from the perspective of opening up other avenues for us to achieve returns by servicing well the needs of other B2C operators, where we don't have the opportunity ourselves to be that operator. So I think you'll continue to see growth and opportunity there. I think the U.S. gaming environment generally is fairly dynamic, and that's. That harkens back to one of the earlier questions. Lots of legislatures every year are looking at tweaks in the gaming laws and changes, and we have to watch those both defensively but also offensively as opportunities for our businesses. And then coupling with this technology theme for a second, the TwinSpires business is an example of what started as a B2C business, and has been remarkably robust as a B2C business, even as other forms of online wagering have started to develop in the country, like, like online sports wagering. It's been remarkably robust. The thing I've been most thoughtful about there is just the unusual occurrence in 2023 of lost races, as opposed to other things that might have affected the business. We lost somewhere around 1,700 races in 2023, and in the first quarter, we've also seen a decline in races, and those have been weather, other things outside of anybody's particular control. But that business as a B2C business has been robust, but also those technology services have been the basis for how we think we can take that business into other things, like providing B2B services to sports wagering platforms. So moving from there into gaming, regional gaming, I think scale. You know, scale, scale's been important. We find that as we achieve scale, we're more efficient. We get smarter, our teams work better, they get more done, our margins can increase. So we like scale in the regional gaming, and for us, it's important to own 100% of the property. That gives more stability to our company, and it's the right answer for our company, as we face this current environment. So, I don't think every regional gaming opportunity out there is for us, but as we've demonstrated over time, we have our model, we have our filter, and we have our approach, and we see opportunities there that we like. And we're not afraid of scale in the regional gaming space because we think it comes with some advantages that can grow and strengthen our company over time. So I think I'd say to you that I like all of our business segments. I think all of them are contributors. I think all of them are really important, and if there came times where they weren't, then we would have to think differently about it. Right now, all our businesses are great contributors with growth profiles and strategies to make them bigger, better businesses, and that's the plan we'll execute on. Thank you. Really comprehensive. Appreciate all that. And then follow up just in terms of the Virginia HRMs after The Rose is opened in at the end of 2024. How should we think about the additional HRM licenses that you have, whether it's a new market and kind of going through a referendum, expanding out existing properties? And what's kind of the timeline that we should, you know, think about in terms of deploying the remainder of those 5,000 machines? Thanks. Our big challenge in Virginia is the 5,000 machines, where we... If you deployed the maximum number of machines we're allowed under every potential license, we wouldn't have enough machines. So, so for us, it's about yielding the machines we deploy. So we were particularly happy to, to move into Northern Virginia with, with, the increase in machines at The Rose. That, that was important, and that's a nice step for us because we think those machines will yield more. Our other, our other, available licenses, it'll always be a comparison of, of two criteria. One is, where do we think we can get the license active? In some jurisdictions, we still need to get a referendum passed. In other jurisdictions, there isn't a need for an additional referendum because over time, a referendum has been passed that would authorize us to be active with HRMs. So the first criteria is, where can we get licenses operational? And the second criteria is, how do we think the deployment of machines in that jurisdiction would compare versus deployment of those machines in other jurisdictions we can deploy in? So that's part of the chess game that we're playing there. And I've said this before, and I'll say it again: Ultimately, it's not that we're gonna get to 5,000 machines quickly. We're going to do that. We're gonna be, as I said in my prepared remarks, we're gonna be somewhere around 4,440 by the end of this year. The real challenge over time is where are the best places to deploy those machines, and perhaps legislatively, there'll be a path at some point to more machines to fill out what we'd like to offer under those licenses. So it's a bit of a chess game, and it's a comparative game, where we're comparing different jurisdictions to each other within the state, and that's something we're actively doing now as we figure out where we want to deploy our machines and where we want these licenses to be. And I hope to have more specifics for you over the course of 2024 to more fully answer that question. Thank you. Nice results. Appreciate it. Thank you. One moment, please, for our next question. Our next question comes from the line of Jordan Bender with JMP Securities. Morning, everyone. I want to touch on Chasers. The project's been pending for a while, yet we know you have the balance sheet and the willingness to execute on that build-out at some point. You know, Bill, loud and clear that there's nothing to announce at this time, but, you know, maybe any updated thoughts on how you see that property or that market? Yeah, thanks, Jordan. We like the market. We like its proximity to the Massachusetts suburbs. So for us, it's the challenge of being comfortable in the site and getting all the approvals necessary in order to move forward. So yeah, I would have liked that to have moved faster than it has, but it hasn't shaken our interest or our confidence in the market. We like the market. It's just when you do a lot of development like we've done, sometimes they go extremely well, and sometimes they go slower than you'd like. And that one is one where I wish it had gone faster. I wish we had news we could announce, but it doesn't change our appetite. The fact that it's been slower getting to the finish line of announcing a complete project plan doesn't change our interest in the market. It doesn't. It just, it's just affected the timing of moving forward on it. But we have a team that works very hard on that, and we'll get it done, and we'll have something to announce, and we will do so as soon as we can. In the meantime, we've been really pleased with our Exacta team because they have been doing a really good job of building their relationship and their customer book with the other operators that are dispersed throughout the state. Great. Thanks for that. And then on the follow-up, for your TwinSpires segment, handle's historically been about a mid-single-digit grower. And you've called out a couple of the unusual items over the past couple of years with the COVID pull forward, the wildfires, loss of races at the track. So as we think about the growth in that business, Marcia, you said you're looking for stabilization. Can you maybe just frame that out, or, you know, what, what is this new growth level look like in the coming years? The last couple of years have been so lumpy. We've just seen so many other variables. We did have this real step up in the percentage of the wagering that was going through the online channel that occurred during COVID, where many of the racetracks in the United States stayed operational, but the fans who traditionally would go to the track weren't able to do that, and it really boosted the online percentage. Some of that was given back a little bit as we emerged from COVID. And then along with that has been this series of, you know, unfortunate events with wildfires in Canada and severe weather and rainstorm. And just we've been in this window where we've just seen a lot of lumpiness and change on actual race dates. So I think, now, I've been doing this, I've been in this industry for almost 20 years, so I've seen other periods where you see a couple of years of lumpy behavior, and, I don't, I don't think it's the new norm per se. I just... Sometimes these things happen in bunches. So I think, I think Marcia, in her comments, and definitely the way that Bill Mudd or I think about it, is we've had some noise going on here. We, we need that to settle out a little bit, to see how the business is doing. But generally, it is, it is the little engine that could. It's, it's been incredibly robust. I know there were a lot of theories in previous earnings calls where, where you'd asked about, how is sports wagering impacting it? How is the business holding up in the face of that? What I'd say is, the biggest thing I look at and the biggest thing I'm worried about is just consistency of content. It's just the availability of the racing product to our core customers on TwinSpires. Our backstop to all this, and over time, it may become incredibly significant. We'll just have to see over time. I don't have the crystal ball. But our ability to service with our suite of technology services, pari-mutuel wagering for other providers of sports wagering, so the sports wagering platforms, we'd like to give them the ability to bet on horse racing. Their technology stacks work differently, and they have to integrate with ours or others in order for theirs to work seamlessly on pari-mutuel, and we'd like to see that happen. We'd like to see the distribution of the product more broadly. We think that's the way to think about the TwinSpires business long term, not just B2C, but B2C plus B2B, just like we're demonstrating with Exacta. Thanks, Bill. Thank you. One moment please, for our next question. Our next question comes from the line of Jeff Stantial with Stifel. Hi, great. Good morning, Bill, Marcia, thanks for taking my questions. Maybe starting off here on the TwinSpires business. Could you just talk a little bit more on what you're seeing from your sports betting partners as it relates to, we'll say, product investment and marketing spend? You know, are you seeing kind of investment going towards cross-selling users and bringing more people into the horse racing platform? Can you just talk about that as it relates to the trajectory of your B2B component? Thanks. I think happy to do that, Jeff, and I always appreciate the question. I think last Derby was really proof of concept. You know, just trying to get, trying to get, deals in place and the technology to work seamlessly. I think we'll see around this Triple Crown event the level of interest and investment they want to devote to it at this time. The advantage of pari-mutuel wagering on horse racing over time is the consistency of the margins and the relatively high nature of the margins versus other products. So I think over time that will become of more of an interest just from a business perspective for sports wagering platforms. But right now, they have a lot of priorities. They can speak for themselves on the different ones that they have, and we're just a piece of that. So I think last year was more proof of concept. This year, we'll see the level of focus and interest they put into the Kentucky Derby. It is a big Kentucky Derby. It's the 150th of it. So I think, like a lot of what you see in the sports arena, they market around big events that are there, and the next big one for horse racing, it's the biggest of the big, is the Kentucky Derby, and that will be a good point to measure progress. But I was very pleased with the level of engagement last year and the interest, and also respectful and understanding that they have multiple priorities right now, of which we're just one. I personally believe that over time, we'll become, and when I say we, I mean the horse industry and this particular product as a wagering product, will become more of a focus. But that'll have to be proven out. That theory will have to be proven over time. Great. Thanks, Bill. And then, turning to the gaming segment, can you just talk a little bit more on what you're seeing for various customer cohorts, kind of, you know, low end, high end, unrated, if there's any sort of discrepancies region by region? Thanks. So what I would say is, that's always a good question and the right question to ask. I don't think there's a change. I think, as Marcia indicated in her notes, last year, I think the customer base was a little stronger. The economy was a little stronger in the first quarter than it is now. But second, third, fourth quarter, going through today, our team's not really seeing material change in the quality and capability of our customers. It's been relatively sequentially consistent. So when we think about our business, we're not particularly obsessed or worried about material changes in the quality of customer and the capabilities and the wallet of the customer sequentially. It's been pretty consistent over the last number of months. It's other things that's driving variations in the business. Marcia talked about, you know, there's some rough weather this winter in January versus last year. December wasn't as bad. February is pretty good. The HRMs, they're growing anyway. You know, they're growing anyway, they're not at maturity yet, so we're seeing growth there, and those products look good. So there are other variables that are really driving the outlook for the business right now, as opposed to variability in the customers' capabilities. Great, very helpful. Thanks, Bill. I'll pass it on. Thanks, Jeff. Thank you. One moment, please, for our next question. And our next question comes from the line of Joe Stauff with SIG. Thank you. Good morning, Bill, Marcia. Just a couple follow-ups. Bill, you know, you had mentioned kind of the benefits of Exacta. I was wondering if you expect to use, you know, that system, within, you know, your various Kentucky properties. I think it's downtown, but I was just wondering more about the expectation to use that in your other Kentucky properties. Yeah, there is product that, without getting too detailed into, in some of the oddities and some of the nuances and availability of products, there are some differences in terms of offerings between Exacta and other providers. And we do expect to have to deploy and have deployed Exacta in some of our facilities. So, I think there's nothing wrong with having more than one central determinant system on your floor. That can make sense. It's whatever maximizes the return on your invested capital, and then you're going to see examples in Virginia and Kentucky, everywhere, where there's going to be more than one central determinant system on the floor, and certainly, Exacta is a major one of those. Makes sense. Then in Virginia, you know, on the existing portfolio, call it roughly 2,800 units, I'm wondering how long—like, I know you wanna say optimize that game offering. It's, you know, it takes some time, and so I'm wondering how long it might take you to kinda optimize that game offering, you know, within Virginia for, you know, say, the existing, so call it 2,800 units? Well, we're gonna be at 4,440 in the third quarter, and we have a team that works pretty hard on where else we can deploy licenses and how many machines we should deploy. And then we work with that team works with Bill Mudd's team constantly to figure out where the optimal what the optimal allocation will be between facilities. So I don't know that it'll ever be done. We'll always be analyzing as we get the 5,000 machines, where it's best to have those 5,000 machines. But of course, we'd also, Joe, really love to change the equation at some point and have more machines, because this is a different environment in than, say, Kentucky, where there isn't a limit on the number of machines. But Virginia's construct under their law is the machines are capped. So yield on machines is a very important concept in Virginia, not quite as important in Kentucky, because we can have as many machines as we want. But ultimately, we'll work constantly as we get the 5,000 to deploy all the machines in Virginia and then to deploy them to the right highest utilization license. But then ultimately, it'd be nice to have more machines, and that's not something I'm foreshadowing. That would just be nice to have, and that's one thing we'd like to see. It would help the state and help the horse industry, because the market would support them. Gotcha. And if I could, just one quick one. You talked about just the, the pattern, you know, you described as, say, lumpy enforcement, you know, of, of the gray market machines in Virginia. Can you, can you give us maybe the right description about, the enforcement pattern in Kentucky for the gray market, for now, the illegal gray market machines? Yeah, they're clearly illegal in Kentucky, so there is, and same in Virginia. There's not a question of their legality, it's a question of the boots on the ground to have them turned off and removed. That's justice moves in the right direction, but it doesn't move uniformly in every jurisdiction, and it can take time. So it's just the reality of, in both the state of Virginia and the state of Kentucky, these things have become ubiquitous. They were, they were pretty widely dispersed, and it's just a manpower and will process to get them removed. And they have been... That's been happening. That's clearly been happening. It's just, it's taken time, and it's been lumpy. Some areas have moved faster than others, and also there really isn't a mechanism where somebody's out there counting to make sure they're all off in every single place, everywhere. That's just something that is moving in the right direction, and we've been happy. But take Virginia, this all happened in the mid to late fall. That's when the court case came down, so these are the months after that happened. Thanks a lot, Bill. My pleasure. Thank you. One moment, please, for our next question. Our next question comes from the line of Daniel Guglielmo with Capital One Securities. Hello, everyone. Thank you for taking my questions. So you all have obviously been developing and are continuing to develop. With that framework in mind, how has the development environment changed, if any, this year versus last? So anything of note around labor availability, supply chain considerations, underwriting versus actuals? Yeah, I think, I think at this point, we've seen the volatility in the environment, and we build it into our plans. So I think if you talk about the Owensboro project and The Rose, at this point, we have a high degree of confidence, just like we did pre-COVID, on timing generally and cost. You know, we're in this environment where there has been inflation, there has been increased costs, but we're able to predict that now and plan around it. So we're back to feeling comfortable about this. There was a little bit of a, you know, the period where emerging from COVID, where there were significant restrictions on supply, supply chains were working differently, and then we hit the heavy inflation environment. And so those environments were different than when we started the project. And our team, I think, just did a masterful job. That's the word I'd use, getting our projects done as cost-effectively and as close to budget, mostly within budget, as possible. So our team's done a great job in a volatile environment, but at this point, I don't describe this as a volatile environment. This is now a predictable environment, where we understand how the supply chain's different than it was pre-COVID, and we just plan around that. So, while others may look at, inflation or supply chain disruptions, we've now had a window where we can see how it works, and we just plan around that. So, when we do our projects now, the Owensboro thing that we talked about, mentioned in our prepared remarks, I feel very, very good about that. The Rose, completing The Rose, I feel very, very good about that. We're in a predictable, volatile environment now, and that's all we need. We just need predictability. So I feel very good about our plans and about timing and budgets. Great. I yeah, really appreciate all that color. And then just around, so the Super Bowl in Vegas brought out some really big spenders, and we think the ultra-luxury consumer strength has been clear. For this year's Derby, have you all seen an increase in interest from those types of spenders? And then, outside of the ticket prices, how would that financial impact be seen on race day? So, what we've seen is extraordinary interest in the Kentucky Derby at all price points. I think, we've been doing this for so long, I think sometimes we ourselves take it for granted. But, you know, we're building our facility, and we're selling product every year that we never had previously. It's a testament to the team that we are doing this so successfully, and it's a testament to the quality and the place of the Kentucky Derby in the American entertainment landscape. So we couldn't be happier about where we are with respect to customer interest at all price points. Whether you're talking about the infield or our most expensive tickets, we are in very, very good shape. We wish we had more to sell than we have. So we feel very, very positive about that. And was there another part of your question that I missed, or did I, did I capture that? Was there anything else to your question? No, you got it. That, that was it. Thank you. Appreciate it. Oh, yeah, my pleasure, Daniel. Thank you. One moment, please, for our next question. Our next question comes from Shaun Kelley with Bank of America. Hi, good morning, everyone. Thanks for taking my question. Bill, you alluded a little bit ago to, you know, the productivity in Virginia, just given the limits on the machine counts there. I was hoping you could help us bridge that a little bit to your expectations for The Rose Resort in Northern Virginia. Could you just talk a little bit about, you know, right now, I mean, we see some extreme productivity coming out of that, you know, a very limited, I think, you know, count of machines up there. Can you give us a sense of kind of how you expect, you know, that to ramp up, either relative to the Virginia average or just relative to your other experiences in that market? You know, how extraordinary, you know, can the returns of some of those, you know, of some of those machines be once you, you know, meaningfully increase the footprint there? Just give us some bounds of your expectations. I think that'd be helpful. Appreciate that, Sean. So, we start with just the size of the market. It's a 6.5-million-person metropolitan area, and that's very large. We're not used to operating in markets with that many people. You take Louisville, for example, where we have Derby City Gaming, et cetera. This is a 1-million-person market. So the Washington, D.C., Northern Virginia market is a very, very large market, and we, of course, would love and we're located right on one of the major arteries, I-95, that runs directly north-south in that Northern Virginia corridor. So, the market's there, the people are there, and we would have liked to have deployed and are deploying as many machines as we can. Our experience so far with our 150-unit facility has been pretty remarkable. It's been pretty remarkable, the level of activity running through 150 machines. So we're really thrilled to open up The Rose with the 1,650 machines, and it'll be a question of learning the customer base, yielding the machines as well as we can in terms of how we incent our different levels of customers to maximize our return there. But I would say academically, we haven't opened yet, but I'd say academically, this is a, you know, this is a case where I wish we had more machines and a larger facility. So this will be about running efficiently and yielding the machines as smartly as we can because we have a limited number of them. So we're optimistic about the market. I feel very good about our team that's gonna be on the field there, and it'll just be a ramp-up period where we get to know the different customers. Remember, when we open the door, we have to learn all our customers. We have to learn one from another and the different levels of play amongst them, and that'll take some time, and we'll get... I hope we open very successfully. I have every reason to think we will, but we'll also get better after we open, as we start to learn who our customers are and how best to work with those different customer cohorts. Thanks. And could you address a little bit, I know you've talked about a lot of your different facilities, but I don't think for Owensboro, you talked yet a little bit about, I think the machine count there, in terms of what your new plan is for that facility is basically 2x what you had originally. Could you just talk a little bit about that? Maybe same question a little bit, the densities in that area, the ability to support 600 machines relative to some of your experiences elsewhere in Kentucky. You obviously know the market, the demographics, probably better than anybody. Yeah, Owensboro is the fourth largest city in Kentucky, and there's a lot of development on the Kentucky side of the Ohio River. Owensboro is on the river, the Ohio River, separating Kentucky from Indiana, and there's a fair amount of development on the Kentucky side, including Owensboro and the surrounding region. So we're gonna open up with 600 machines. There are properties on the Indiana side that help us measure and size the market, and we have our expectations on how big the market should be for us, given the Kentucky side of the population there. So we've built our model, not just based on having Ellis Park in the area with a modest amount of machines, but looking what we see on the other side of the river across that region, and then measuring how much of the population and density is on the Kentucky side. So plenty of inputs into our model to help us figure out how to size that project correctly. Thank you very much. Thank you. My pleasure, Shaun. One moment, please, for our next question. Our next question comes from the line of Dan Politzer with Wells Fargo. Hey, good morning. I was wondering if we could drill a little bit more into the Derby. Bill, I think you mentioned a step function change in growth for the 150. Maybe you could kind of quantify that. I think around last year, you gave us kind of an EBITDA range we should expect or, you know, maybe bridge us to the kind of key pieces that are gonna be driving that growth. Sure, Dan. Good, good to talk to you. So we're not putting out a number. We're not providing guidance on, on the increase, but I would point out the size of the change in the facility. We, we created a great deal of additional high-end seats. There's a great deal of also interest in the Derby, generally, it's building, and this is the 150th. So, I, I would say whether you look at sponsorships, you look at attendance, we don't know yet on the wagering, but that's been trending in the right direction. But we look at our key components to how you build the economics for the Derby, and they all look really, really good. But for purposes of the modeling you do and the thinking you do, I would look at trends from the last number of years on where those components are heading, and then review with the team and through the press releases the infrastructure that's being implemented for this year, the additional seats, the type of seats, the level of hospitality, and that will give a sense of why we're so optimistic that we're gonna be looking at a really special version of the Derby. And you used the term step function increase. That was actually Marcia said. I know what she means by it, and I share that optimism. And we'll go out and execute and make it happen. Got it. Thanks. Then, just for my follow-up, Exacta, I think that you called out within the live and historical racing segment, a $5 million EBITDA uplift there. I think for the Virginia properties, the margins were more or less the same relative to the prior year period. So how should we think about, you know, those cost synergies flowing through in 2024, the extent that there should be more margin uplift, and maybe if there's any offsets to that, that you guys are managing through? Well, it's never a single variable, and that's... I mean, we all like to, to reduce everything to a single variable, and it's hard to do that. But this coming year, we have a, a full year of the Exacta efficiencies coming in. We have new machines coming online in The Rose, in what we hope is a, a high-yield market. So there, there's gonna be pros and cons to the margins, but Exacta is very much a, a real good guy. I think how we yield the machines, I think you'll start to see that we're good at that, and we're thoughtful about that, and we'll get better at that. So those will be some of the good guys, and, and there might be other things that impact it as well. I do think we drove margin improvement, and we're gonna keep working as hard as we can on the things that we control to keep doing that, and hopefully, we can. Got it. Thanks so much. Thank you. I'll now hand the call back over to CEO, Bill Carstanjen, for any closing remarks. Thank you all for your time today. We ran a little bit over. There were a lot of questions, and it was great to go through these questions. We appreciate the questions. I also want to thank our team here in the room and out in the field. They're making it happen for us. They're very focused on building a great company and delivering returns for our shareholders. So we'll get after it, and we'll talk to you soon, in seven or eight weeks, I guess, very close to the Derby. Thank you all very much. Ladies and gentlemen, thank you for participating. This does conclude today's program, and you may now disconnect.