Good day, ladies and gentlemen, and welcome to the Churchill Downs Incorporated 2024 Q3 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. We ask all Q&A participants to please limit themselves to one question. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Sam Ullrich, Vice President, Investor Relations. Thank you, Andrew. Good morning, and welcome to our Q3 2024 Earnings Co nference Call. After the company's prepared remarks, we will open the call for your questions. The company's 2024 Q3 business results were released yesterday afternoon. A copy of this release announcing the 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 reports on Form 10-Q and 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-Q 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, Sam. 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 will share some high-level thoughts on our growth plans for the Kentucky Derby and our HRM businesses in Virginia and Kentucky, and then Marcia will provide insight into our financial results, as well as an update on our capital management strategy. After she finishes, we will take your questions. We delivered all-time record net revenue and all-time record adjusted EBITDA in the Q3. We also delivered record Q3 revenue and adjusted EBITDA across both our live and historical racing segment and our gaming segment, as well as record adjusted EBITDA for our TwinSpires segment. Our strategic choices and capital investments continue to drive best-in-class growth, and we look forward to our future with confidence and focus. Speaking of the future, let's start with our growth plans for the Kentucky Derby. We have made significant progress on the Starting Gate Pavilion project at Churchill Downs Racetrack that we announced on our earnings call last quarter. This project will transform the seating area in front of the Starting Gate Suites from 10,000 bleacher seats to a combination of approximately 8,500 premium stadium and trackside box seats. We will also significantly improve the amenities for these guests, as well as for an additional 2,800 people seated in existing surrounding sections, who will be able to access the hospitality options of the newly renovated section. We are on track to complete this project on budget and on time for next year's Kentucky Derby. We are also planning to complete over the next 3 to 4 years a series of renovation and development projects that will provide new and extraordinary experiences in the sections starting approximately 180 feet past the finish line through to the First Turn Club. The scope of this project covers approximately 500 feet of racetrack frontage, starting with the Sky Terrace structure, which we will take down and replace with a new building, and extending through the box seats adjacent to the First Turn Club. To put this further in perspective, the First Turn Club has approximately 330 feet of track frontage. These projects will replace over 10,000 existing seats that currently consist of uncovered box seats and dated dining areas, with approximately 16,000 seats representing a variety of premium hospitality experiences. This is a considerable undertaking and will meaningfully increase the number of reserved seats and experiential options at various price points on the front side of the racetrack. We are also designing a series of new infield experiences that will, in part, convert the current temporary infield structures, where we seat approximately 800 guests, to permanent premium structures, providing hospitality for approximately 7,000. Accomplishing this requires a new ingress and egress option for our guests to reach the infield. Hence, we are exploring a novel additional tunnel between the front side and infield that will be part of the overall experience as guests arrive to a reimagined Oaks and Derby infield. The finish line/first turn projects, on the one hand, and the infield projects on the other, will be worked on simultaneously in stages, with some areas ready for the Kentucky Derby in 2026 and the remaining areas opening for Derby in 2027 and 2028. There is a lot of careful planning underway, as collectively, these projects will, by far, be the largest expansion we have done to date and will increase our premium seating inventory by approximately 20%.... We will provide a more detailed update on these multiyear development plans at our next earnings call in February of 2025. Our commitment to investing in our flagship asset reflects our belief in our ability to generate consistent Adjusted EBITDA growth with nominal levels of risk for years to come. Next, regarding our HRM expansion, first, Virginia. We opened our new HRM property in Dumfries with one thousand 650 machines, called The Rose, on 21st October for a VIP event, and then executed our official soft opening yesterday. We are planning to have the grand opening with appropriate festivities and more extensive marketing on 7th of November. We decided to proceed with the soft opening for a couple of weeks after the VIP event to give the team time to assimilate properly, given the size of the property and the importance of establishing the right customer experience. Given the volume of customers we saw at the VIP event and at the soft opening yesterday, we certainly have taken the right approach. We look forward to ramping the crowds and accelerating the marketing as we approach the grand opening date. We are excited to see The Rose go live and are immensely proud of our team for their efforts to get us open. As we discussed on the July earnings call, we filed a building permit application in northwestern Henrico County, Virginia, which is just north of Richmond, to open a new upscale HRM entertainment venue called The Rosshire Gaming Parlor. We plan to convert a former furniture store into a new facility that will feature 175 games and have other gaming-related amenities. The permitting process is far along, and we will begin construction when it is complete. We will update you on our next earnings call. We are also expanding the number of HRMs that we have in our Richmond venue. During the Q3, we added approximately 100 games, and we anticipate adding an additional 400 before the end of 2025. We will be renovating an unused section of our building to enable this expansion. Separately, we will also shift some of our existing HRMs between locations to optimize the overall performance of all of our Virginia properties. By the end of 2025, after we have completed this expansion, we will have 5,000 HRMs deployed, the maximum permitted under the law in Virginia, up from approximately 4,450 machines that we have deployed today after the opening of The Rose this week. Virginia has been a great investment and business environment for us, and we look forward to expanding our footprint and partnership with the Commonwealth. Our HRM opportunities are inextricably tied to our Colonial Downs racetrack and our franchise as the exclusive operator of thoroughbred racing in the Commonwealth. In 2025, we will introduce a significant Kentucky Derby qualifying race, which will be a first in the history of racing in Virginia. The winner of this race is virtually assured a slot in the starting gate for the Kentucky Derby in 2025. Many in the Commonwealth are very excited to see this new race and also to see the increase in the number of race days from 27 this year to 44 in 2025, and 50 in 2026. We believe we are meeting or exceeding the expectations of the Commonwealth, and in turn, Virginia has been a great place for us to grow. In Kentucky, we are on track to open our new Owensboro HRM venue in the Q1 of 2025, on time and on budget. It is located next to Highway 60, just east of Owensboro, the 4th-largest city in Kentucky. This venue will initially open with 600 HRM machines, along with a center bar, sports bar, and other amenities, and will celebrate Kentucky's rich bourbon heritage. We also announced last evening that we will be developing a new HRM entertainment venue in Calvert City. This new facility is the extension property permitted by our Oak Grove HRM license. Calvert City is a great location for our 8th HRM venue in Kentucky, with a population of 300,000 within a 60-minute drive and a location near the meeting of 2 interstates that will allow easy access for customers from several surrounding cities in southwestern Kentucky. We are confident that this will be a great addition to our portfolio of HRM assets. We anticipate spending $40 million-$50 million to build a property that will include capacity for 250 machines, along with other amenities. We plan to open it in early 2026. HRMs and Exacta's HRM technology are a key strategic focus over the next 5 to 10 years for our company. These high-growth, high-margin investments provide an excellent return on our shareholders' capital. In summary, Q3 was another strong quarter for us with record financial results. We believe there are many growth opportunities for us to pursue in the coming years, whether it be further investment in our flagship asset, the Kentucky Derby, new investments utilizing our capabilities around HRMs, or growth in ancillary or adjacent businesses aligned with our long-term strategic plans. We have an excellent pipeline of additional opportunities that we are evaluating to position our company for future growth. We also have one of the best balance sheets in the industry, with great, great assets that we believe will continue to drive Adjusted EBITDA and free cash flow. We remain committed to delivering superior returns for our shareholders, with consistent execution of our growth strategies over the long term. These are exciting times for our team. With that, I'll turn the call over to Marcia, and then we will take your questions. Marcia? ... Thanks, Bill, and good morning, everyone. I'll start with a few insights on our financial results, and then provide an update on capital management. First, regarding Q3 financial results, as Bill shared, we delivered record net revenue and record Adjusted EBITDA in the Q3. We also delivered record Q3 revenue and Adjusted EBITDA for both our live and historical racing and our gaming segments, and record Q3 Adjusted EBITDA for our TwinSpires segment. Our diversified portfolio of businesses generated 10% growth in revenue and 8% growth in Adjusted EBITDA on a quarter-over-quarter basis. Please keep in mind that we achieved this level of growth off of a very strong Q3 last year. In our live and historical racing segment, our Virginia HRM properties were the primary driver of Adjusted EBITDA growth on a quarter-over-quarter basis. Our Virginia HRM properties increased Adjusted EBITDA by $15 million, or 40% compared to the prior year quarter. As a reminder, we completed the Exacta transaction on 22nd August last year. As a result, our Virginia HRM properties realized $3.9 million of incremental savings from lower Exacta fees in the Q3 of this year compared to the prior year quarter. Please keep in mind that we will continue to benefit from the Exacta transaction as we add 1,650 additional HRMs with the opening of The Rose, and as we add HRMs in the Richmond area over the next year. We also benefited in Q3 from ongoing upgrades to the game titles and floor layouts at our existing Virginia HRM properties. These properties, excluding racing, generated a combined margin of over 54% during the quarter, up over 6 points compared to the prior year quarter. Our Kentucky HRM properties performed well overall in Q3, despite a strong Q3 comp last year for Derby City Gaming. Oak Grove continued to grow through market penetration with strong margins. Turfway Park and Newport also grew nicely during the Q3 with improving margins. Regarding our Derby City Gaming downtown Louisville property, we will have our one-year anniversary for this property in December. We remain committed to growing this great entertainment venue in the heart of downtown Louisville, and the team has worked diligently to reduce costs to improve its profitability over the next year, while the top-line support for this property builds. Turning to our TwinSpires segment, our Exacta business contributed meaningful adjusted EBITDA to our TwinSpires segment again this quarter, contributing more than $10 million of adjusted EBITDA. The TwinSpires horse racing business generated lower handle, primarily from less content access, while still delivering very strong margins in the Q3. Last, regarding our gaming segment, our Terre Haute property performed extremely well since opening on 5th of April. As expected and communicated on our last quarter's earnings call, the margin for Terre Haute has normalized in the Q3 based on the long-term expected gaming tax rate. Regarding the performance of the balance of our regional gaming properties, first, it is important to note that we had one less weekend day in the Q3 of this year compared to the prior year quarter. Second, the regional gaming consumer behavior remains consistent with recent quarters. We see strength at most of our regional gaming properties in rated play. In contrast, most of our regional gaming properties are showing lower unrated play. Lastly, we did see some increased competition around a few of our properties during the quarter. Our Q3 same-store, wholly owned regional gaming margins, excluding the prior year nonrecurring business interruption payments, were lower by 1.5 points compared to the same period in 2023 because of regional gaming consumer softness and increased competition. Turning to capital management, we generated a record $591 million, or $7.93 per share of free cash flow during the first 9 months of the year. This is up nearly $145 million, or 32% over the first 9 months of 2023, primarily from the strong cash flow generated from our businesses. Regarding maintenance capital, we spent $50 million in the first 9 months of the year and continue to expect to spend between $90 million and $105 million in total for the year. Regarding project capital, we spent $368 million through the first 9 months of the year and continue to expect to spend between $450 million and $550 million for the year. Based on the project capital for the Churchill Downs Starting Gate Pavilion and Courtyard and our HRM expansion projects in Virginia and Kentucky, we expect our 2025 project capital to be between $250 million and $325 million. Regarding our dividend, our board of directors approved a 7% increase in our dividend, which will be paid out on January 3, 2025, to shareholders of record on December 5, 2024. This is the 14th consecutive year of increased dividends per share for our company. At the end of Q3, our bank covenant net leverage was 4.0 times, and we expect it to remain at this level through year-end 2024. We then expect our bank covenant net leverage to decline relatively quickly in 2025 as our investments in Indiana, Virginia, and Kentucky continue to deliver meaningful Adjusted EBITDA and free cash flow. Overall, we are very pleased with the record results that our team has delivered for the Q3. We remain well-positioned to grow over the long term, fueled by our tangible pipeline of growth initiatives and supported by our strong balance sheet. With that, I'll turn the call back over to Bill so that he can open the call for questions. Bill? Thank you, Marcia. We're ready to take your questions now. Certainly. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment, please, for our first question, and our first question comes from the line of David Katz with Jefferies. Hi, good morning, everyone. Thanks for all the detail. So I, I'd like to just talk about Virginia so far, right? There, there's a lot going on in there. Bill, if you could just talk about how you feel about your progress there, any, you know, surprises, you know, good or not good, you know, any change in what you think the opportunity could be, there over time, you know, any of that around Virginia, which, you know, appears to be going quite well so far. Thanks. Sure. Good morning, David. So, a big component of the P2E acquisition that we closed at the end of 2022 was the promise of Virginia. When we acquired P2E, there were about 2,300 HRMs or so deployed. We knew there was authorization to go to 5,000, and we've been executing on that. So obviously, the biggest component of that execution was the construction of a very complex property in Dumfries, which we've now completed and opened and will be ramping over the next several quarters, and it'll probably ramp over the next few years. So now, as good as it's been to this point, now we're going to really see the fruits of our labor around Dumfries and deployment of the other machines that we're allowed to deploy in the jurisdiction. So, it's going very well. Obviously, you can see that in our numbers. We thought that we could make improvements to operating processes. We thought we could improve game layouts and game selection, and we also thought we could deploy the rest of the machines in a way consistent with some of the properties we've built around the country. So, that's well underway. Very optimistic, very proud of that team, very proud of their capabilities, thrilled to open in the Washington, D.C., Northern Virginia metropolitan area. We've seen good success with the process by the state to curb the deployment of illegal gray games. That's something that we've seen progress on. They're clearly illegal. The attorney general, other state law enforcement agencies and figures have commented on that and given direction on that, and that's a battle that will continue. There still are gray games deployed there. They keep popping up, but we're very pleased and confident that the law enforcement authorities are hard at work to enforce the law. And that's a benefit to not only the safety of the consumer and the integrity and reliability of gaming in the jurisdiction, but it helps all the legal properties that are in the state that play by the rules and follow all the processes that are set by the state. So a big thumbs up for Virginia, optimistic, encouraged, and just want to get in there and get the work done on building the market around Dumfries. Thank you. One moment, please, for our next question. And our next question comes from the line of Barry Jonas with Truist Securities. Hey, good morning, guys. Wanted to ask about your M&A strategy. Can you talk about the parameters you're most interested in as there are things out there for sale that checks those boxes? Thanks. Good morning, Barry. So M&A has been a big part of the growth we've delivered as a company over the last number of years. I f you look at the last couple deals we've done, P2E, Exacta, we always wanna have a plan for how we can not only improve on the operations of assets we get, but also grow into new markets. You know, we're looking for businesses where we think we bring something to the table to improve those businesses, to drive long-term growth for the company. So in general, we look for businesses where we think there's a franchise there, where we think there's an ecosystem where our collection of skills and other assets can add to the mix and deliver growth. We're not a synergy play type shop in general. We, while we're happy to take advantages of synergies, generally, we're more focused on true organic growth that we can drive with our collection of skills added to whatever we pursue. So I say all that to say that we've probably occasionally, hopefully pleasantly surprised our investor base by doing deals that once they understood, they realized made a lot of sense for us. But we're a creative, thoughtful shop. Our M&A team and our operations teams are very experienced, and we look at a lot of different things that are directly in our strike zone or immediately adjacent to our strike zone. So I believe right now is a nice environment for M&A. O ur pipeline feels good, feels promising. It doesn't mean we'll get things done. You can never tell. That's not always in our control. But the type of things we look at, the type of things that are important to us and that we get excited about, we think there are possibilities out there, and if you look at our track record, we're always very patient. We're always very thoughtful. We're not on any assembly line. We do deals when they make sense to do and when we're fairly confident we can improve what we buy. So in general, that's how I describe how we look at opportunities. Thank you. And our next question comes from the line of Dan Politzer with Wells Fargo. Hey, good morning, everyone. So my question's on the project pipeline, right? You've announced Richmond, the HRM facility, Calvert City. Can you talk about maybe how you gain comfort investing in these property expansions, given some of the challenges that you've experienced at Derby City Gaming Downtown? And along those lines, in terms of Derby City Gaming Downtown, you know, is there a glide path or expectation on when the profitability could start coming in there? Thanks. Sure. Good questions, Dan. So we've had a lot of experience building properties, and it's fair to say they never go exactly as planned. Sometimes they're better, and sometimes they're a little worse, but our experience with HRMs has been overwhelmingly positive. So if we talk first about within this realm of HRMs, if we talk first about Virginia, we know the Richmond market really well. So we're capacity constrained right now, so expansion within our facility, which is a converted old large department store, conversion of some of the space we were using for storage into more floor space, just makes sense. Not a huge amount of risk there because we can see our database, and we can see our level of consumer activity, so we feel pretty confident about that. And Henrico is in the general market. It, it's north, but it's still in the general area, so we feel pretty good about that market in general. We can see from our database where people come from and triangulate where it makes sense for us to put a facility. So Dumfries, also, we obviously feel really good about that, given the wealth profile and the sheer demographics in that MSA. So just a lot of confidence based on experience, not only generally across the country, but in those specific markets and in those specific states. When it comes to Kentucky, we've had a lot of success. The one slower property has been Derby City Downtown. I feel pretty good about the trajectory that's gonna be on, but here's where we got surprised with Derby City Gaming Downtown. A lot of the thinking and planning around that occurred in the pre-COVID and COVID era, and Louisville, as a city, has been slow to rebound from COVID. People didn't go back to work downtown at the same level that they were there prior to COVID, and that's created a little bit of headwinds for that property. But Bill Mudd and the operating team have worked hard on right-sizing the cost structure there, and we've seen sometimes properties ramp a little slower, and we know what we're doing, we understand the market, and we'll just go to work. But there was a macro change in downtown Louisville, not necessarily Louisville as a whole, but there was a macro change in downtown Louisville, and that was bodies downtown post-COVID, and that's been a headwind that we've been working through. But I've seen properties start slow, and I've been with this team a long time, and we have a playbook when that happens. We go after the cost structure, we manage the cost carefully, and we slowly, deliberately, and consistently start working the database and the marketing to build. So that property will not be in the short term an A plus, like we've seen with Derby City or like we've seen with Oak Grove or like we've seen with numerous of our properties, but we'll get it in line. We'll get it functioning pretty well, and I don't think that's a long-term thing. Y ou'll see immediate and consistent improvement quarter to quarter, starting next quarter. Thank you. Our next question comes from the line of Chad Beynon with Macquarie. Hi, good morning. Thanks for taking my question. Bill, last quarter, you teased us a little bit with some of the potential growth drivers down the road with Exacta, beyond the internal saves and the growth in the third-party deals. T hose were, you know, ETG opportunities and also international. Anything to report or give us, you know, just a little bit more hope or clarity in terms of what growth could be, you know, beyond 2024, 2025 in those areas? Thanks. Sure, Chad. Happy to speak to that. So those plans chug along. We're deployed in Malta in a partnership with another company. T here are other opportunities there, but at a company of our size and scale right now, that's not material, so I decided not to comment directly on that during my actual formal earnings comments. But that's underway, and that's part of the long-term growth strategy for Exacta, and it feels good. It feels like there'll be opportunities not only internationally, but potentially in other jurisdictions within the United States. So I don't have anything material to announce on this call, but it is something that our team works on and focuses on, and it's a part of the overall strategy for that business over the next number of years. We are seeing success. We've already deployed overseas, and you'll see other examples of deployment overseas in the relative near term. Thank you. And our next question comes from the line of Shaun Kelley with Bank of America. Pardon me, Shaun, please check your mute button. That was a pretty easy question. I was hoping for a tougher one. Do we wanna come back to Shaun? We can go down the list and return to him, if that makes sense. Sure. One moment, please, for our next question. Our next question comes from the line of Jeff Stantial with Stifel. Great, good morning. Thanks for taking our question. Maybe following up on Dan's question from earlier and focusing on Dumfries, and really specifically more on the cadence of how you see that ramp up progressing. Bill, you've talked about it a bit before on this call and in prior calls as well, just variance in ramp timing for some of your other openings. You know, Northern Kentucky, you know, grew a bit more gradually than, say, you know, an opening like Terre Haute. Just curious, where just to hear your thoughts on where you think Dumfries might fall on this spectrum, you know, given the project and the market characteristics here, and maybe, you know, in that, just how we should think about Q4, specifically, given the full launch of the ribbon cutting won't be until early November. Thanks. I'd break that up into a couple of components. First, our employee base there will be somewhere around 450 or so to start. And so that's. It's a big property, and that's a lot of new people in a new market for a facility of that size. So it's really important to us that the customers, when they visit that facility for the first time, for the first couple times, they have a really great experience. Obviously, we want them to have a great experience every time they come to visit, and we will focus on that. But when they first come, when they're sampling this for the first time, most of these folks have been to other gaming properties. They have expectations, and we need to meet and exceed those expectations. So ramping carefully to ensure that we give the customers a great experience is really important. And this is a big property. This, there's a lot of operational procedures and processes going on here, and we wanna make sure we get it right. So in general, our experience has been, bigger properties ramp a little bit slower than smaller properties. So, now, there are lots of things can affect that. There's not a lot of direct competition in the immediate area of this property, since some of the further areas of the MSA, there certainly are. So we'll have to see how that impacts how this opens up. But, first and foremost, the focus is on give these new customers a great experience, listen to their feedback, train our team up to make them as good as they can be, and then we start mining our database, building it, and then mining it. So in general, compared to a real small facility, this will ramp a little bit slowly, and we'll be looking at growth from this for a long time to come. So Q4, I couldn't be more excited about this property than I am, but success isn't defined in the Q4 of 2024. Success is defined on how we build this quarter to quarter over the next number of years, and that depends on consistency, focus on customer service, and giving the consumer the best experience that we can. So this is not a harbinger that we're gonna start slow. That's a market with, 4+ or 5 million people over the age of 21. This is a big market to introduce a facility like this. However, we are playing for the long term, and that means delivering great experiences for these customers, all from a team member base that is real new to that market. Thank you. Our next question comes from the line of Joe Stauff with SIG. Good morning, Bill, Marcia. I wanted to ask about the Virginia revenue growth that you experienced in the Q3, obviously, big growth. And realize there are a number of layers to that, but I was wondering maybe if you could disaggregate that a bit, you know, and tell us about, say, the bigger layers and contributions of that growth, you know, largely trying to think about, you know, the sustainability of that growth rate, specifically in Virginia, going forward. Sure. So it's fun to talk about Virginia. It's fun to talk about a lot of the areas of our company, but Virginia is a jurisdiction where a lot of things are going very well at the same time. Sometimes when you find that, it's hard to run single variable experiments. Here are the things that are going very well. We believe our operating team and our processes, based on our experiences across the rest of our company, have really made a difference in Virginia. We think we are operating the properties better than they've ever been operated before. We think our work on game titles and game mix, and our analytics around what's performing where and potentially why, have made a difference when we've responded to that data that we've mined. We think that the enforcement actions with respect to gray games are a real tailwind that's driving performance. We also think the markets aren't mature yet, and people are appreciating HRMs as a gaming option and becoming more familiar with it, and it's spreading deeper into potential customer segments. Those are all things that are going well. This is a market that's not mature yet. It is not a mature gaming market in any way, and we are learning. We are operating better. We are seeing strengthening action from law enforcement agencies on working against illegal gaming. All those things are a part of the tailwind that's driving the significant performance improvement of Virginia as a whole. I'm going to leave my answer at that, because trying to break all that down into specific percentages require experiments that you can't do in the real world. These are just all positive factors that are making a difference as a whole. Thank you. Our next question comes from the line of Shaun Kelley with Bank of America. Hi, everyone. We'll try this again. Can you hear me? We can hear you, Shaun. We're ready for you now. Okay. Glad, glad we found you out there. Thank you. So, Bill or Marcia, I just wanted to ask a little bit about the comments on the race calendar for next year. Obviously, you know, very encouraging that you can reciprocate a bit with Virginia and, you know, the ability to continue to add to, you know, to that on the horse racing side. Can you just help us think through the financial implications here, you know, in terms of, is an increasing race calendar going to be, you know, something we need to factor in a little bit in terms of profitability? And on the flip side, you know, is there an opportunity down the road as you continue to partner with the state of Virginia about what this might mean for the future? Thanks. Racing in Virginia was a big component of why the legislature wanted to introduce HRMs. Virginia is a jurisdiction that has a storied history with thoroughbred racing, that activity largely disappeared, all the racetracks had closed, and they wanted that back. They wanted that agricultural component and that industry back in the state. Building that is a part of what the Commonwealth wanted to see with the introduction of HRMs, and of course, it is a core component of our property, and it goes back to one of our tenets of what we look for. We like the complexity of an ecosystem like this. We understand how all this fits together. We understand the racing. We believe in the racing, and the racing has a couple components. When you can introduce good content into the racing ecosystem, we have several ways to capture that. We can capture that with on-track activity, so sponsorships and other things, attendance, wagering on track, but we can also capture it through simulcasting and in particular, online wagering on horse racing, including our own TwinSpires. So as we introduce higher quality racing and better racing and Derby prep racing, that will improve the performance of racing. But given we've also deployed 5,000 or will have deployed 5,000 machines relatively shortly in the jurisdiction, the impact of that in terms of materiality to the overall operations of Virginia is harder to isolate and understand. It's not a big economic driver in and of itself, given it sits as a part of HRMs, but it's a positive one, and it's one that we're going to focus on, and it's critical to the overall ecosystem and relationship with the state. It's part of the promise we have with the state that we will build that industry, because not only is it of some improvement to our bottom line, it drives economic activity throughout the rural regions of the state and across the training community, the farms, the feed providers, and all of the other parts of the ecosystem that drive benefit and perceived value to the state. Thank you. Our next question comes from the line of Daniel Guglielmo with Capital One Securities. Hello, everyone. Thank you for taking my question. I wanted to focus on the HRM consumer strength in both Kentucky and Virginia. Why do you think the demand in those states has been able to hold up so well when compared to other regional gaming states? And how is that demand compared to what you expected when building the platform in Kentucky and then underwriting P2E? That's a good question, Dan. Happy to talk to that. There are several factors that contribute to what you see as clear performance across Virginia and Kentucky. Start with the fact that it's not a mature product yet. It's not mature in the markets that it's open in, and as a product itself, it's still improving. We are introducing more games, better variety, better math. We're driving product improvement, product awareness, market penetration. It's very high margin, so when you do these things well, you capture a very high percentage of it to your bottom line. So it's different. It's a new thing. It's a new thing, and it just doesn't track because of that. It has different attributes than, say, a traditional regional gaming. It just performs differently, and that's a function of all the factors I've just mentioned. They're all important, and they all provide a tailwind that gives a different financial profile than you see in other spots in gaming right now. Thank you. One moment, please. Our next question comes from the line of Jordan Bender with Citizens JMP. Good morning, thanks for taking my question. I wanna touch on the balance sheet. We don't know the size of the budget for the multi-year project at the track that you just announced, Bill, but does the balance sheet reaching the targeted range open up larger growth projects or opportunities that you might not have otherwise looked at in recent years? Thank you. As our company's gotten bigger, we can dream bigger, and we can execute on bigger projects. That's been a thrill for those of us that have been around for a long time, myself, Bill Mudd, Marcia Dall. Those of us who've been around for a long time are really pleased to see, as we get bigger, that we have the capacity and capability and experience across our team to go execute on bigger projects. So as we finalize, work through, build out projections and costs for the derby projects we talked about, we do so with a lot of confidence. Over the last couple of years, we've been focused on Dumfries, we've been focused on getting Owensboro done, completing the paddock renovation project, all of these projects. Now we're going to see those pay off, and we're gonna see the cash flow come off of those, and we expect to be able to delever relatively quickly. And that just means we've got more firepower to go out and do great things. So we're busy figuring out how best to deploy that capital. And as we've gotten to be a bigger company, and a very well-run company, this capacity is important to us because we have a lot of ideas that we wanna have the size to be able to go out and do. And of course, ultimately, this is a function of what return we'll provide to our shareholders. Total shareholder return is never far away. It's always the immediate focus for us. And as we get bigger and stronger and do bigger projects, that's not gonna change. It's that return we think we can generate. But now we've got the size. As we're growing, we've got the size to go out and do bigger projects. Thank you. And our next question comes from the line of Ben Chaiken with Mizuho. Hey, how's it going? Thanks for taking my question. In Virginia, there's a lot of positive developments, which you thoughtfully walked us through, the race calendar, greenfield developments, and then overall relationship with the state. Y ou suggested in some of your earlier comments, expanding your footprint in Virginia over time. There's obviously a goal and a limit of 5,000 machines within Virginia. Can you talk to us about the path, if any, you see, to potentially expanding that number over time? And then, related, with your existing footprint, is there theoretically more capacity, or would you want or require a new property? Thanks. Without speaking out of turn, we think the Virginia model works extremely well, and we think we are delivering for the Commonwealth as well as for our shareholders. We do think it's a model that works, and if the state has interests and willingness, we hope to talk to them about more. We think, from a racing perspective, we'd love to see more days run in Virginia over time, and consequently, we'd like to see more HRMs deployed over time in order to support that. You know, we serve at the discretion of the state. Our franchise is a discretionary right given to us by the state, and we hope to talk to them about it. But it's right now our focus is on delivering on the promises we've made them so far and delivering for the people of Virginia and for the state. And hopefully, if we prove the value of that model, they'll be willing listeners to talking about improving and doing more in the state. But it's hard to talk about things we don't control, and I don't wanna make promises we can't keep. But we think Virginia is a shining example of how you make Thoroughbred racing work in a jurisdiction in a way that is a win-win for the state, for us as the operator, and for all the subsegments of the Thoroughbred industry, the farms, the trainers, the horse owners, the people that grow the feed, the people that take care of the horses. It's a win-win for everybody connected to the industry. Thank you. And I'm showing no further questions at this time. So with that, I'll hand the call back over to CEO, Bill Carstanjen, for any closing remarks. Thank you. And, for those of you on the call and for those of you who are investors in our company, I wanna thank you for your confidence that you've shown in us, and I want you to know that we take it very, very seriously. And, this is an exciting time for our team because we think we have the support of our board and the support of the investor community and the opportunity to do great things. So we're going to do the best we can to drive returns for you, and, we're excited to talk to you in February, to share more of our progress in the interim. So thanks very much, and talk to you all soon. Ladies and gentlemen, thank you for participating. This does conclude today's program, and you may now disconnect.