Greetings, and welcome to the PENN Entertainment second quarter conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please press the one followed by the four on your telephone. If at any time during the conference you need to reach an operator, please press star zero. I would now like to turn the conference over to Joe Jaffoni, Investor Relations. Please go ahead. Thank you, Dina. Good morning, and thank you everyone for joining PENN Entertainment's 2022 second quarter conference call. We'll get to management's presentation and comments momentarily, as well as your question and answers, but I'll first review the safe harbor disclosure. In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. These statements can be identified by the use of forward-looking terminology such as expects, believes, estimates, projects, intends, plans, seeks, may, will, should, or anticipates, or the negative or other variations of these or similar words, or by discussions of future events, strategies, or risks and uncertainties, including future plans, strategies, performance, developments, acquisitions, capital expenditures, and operating results. Such forward-looking statements reflect the company's current expectations and beliefs, but are not guarantees of future performance. As such, actual results may vary materially from expectations. The risks and uncertainties associated with the forward-looking statements are described in today's news announcement and in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and Form 10-Q. PENN Entertainment assumes no obligation to publicly update or revise any forward-looking statements. Today's call and webcast will include non-GAAP financial measures within the meaning of SEC Regulation G. When required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today's press release, as well as on the company's website. With that, it's now my pleasure to turn the call over to the company's CEO, Jay Snowden. Jay, please go ahead. Thanks, Joe. Good morning, everyone. Joining me today is our CFO, Felicia Hendrix, and our Head of Operations, Todd George, as well as other members of our executive team. As usual, we have provided a link to our investor deck in our earnings release, which we'll be referring to in our prepared remarks. I'm sure you no doubt noticed our company's new logo and name change to PENN Entertainment. Over the past few years, PENN has transformed our business through a highly differentiated strategy focused on organic cross-sell opportunities, which is reinforced by our investments in our market-leading retail casinos, sports media assets, owned technology, including a state-of-the-art, fully integrated digital sports and online casino betting platform, and an in-house iCasino content studio. Our new name maintains ties to our legacy while better reflecting our evolution into North America's leading provider of integrated entertainment, sports content, and casino gaming experiences. Next month, we'll also be celebrating the 50th anniversary of PENN National Race Course, which is where our company's story began. We're all proud of our heritage and how Peter Carlino took over from his father and grew the company from that single racetrack into one of the top regional gaming companies in the country. I'm honored to follow in his and Tim Wilmott's footsteps and to help write this next chapter in our company's growth story. In terms of our results, as you'll see on slides six and seven, we had a good quarter with consistent performance across the portfolio. We beat consensus on both revenues and EBITDA and generated sequential upside over last quarter, thanks in part to the performance of our interactive segment and strong results at our retail operations, despite a tough comp against the second quarter last year. As highlighted on slide 10, our destination properties, which benefited from hotel remodels, new restaurants, entertainment, and Barstool-branded sportsbooks, performed particularly well in the second quarter. Our mychoice database has increased by over 1.2 million registrations over the last four quarters, driven by both our retail properties and our new interactive offerings, which provides significant opportunities for future growth. We are encouraged by the ongoing visitation and engagement, growth in the VIP segment of our database, in addition to year-over-year increases in rated theoretical across all segments, except those at the age 65 and above, which is highlighted on slide 11. Our unrated segment trends, though down in the second quarter year-over-year, partly due to federal stimulus payments last year and more entertainment options outside of our casino offerings and online offerings available this year, also reflect strong conversion of non-rated players into our myc hoice loyalty program. Turning to slide 12, our three Cs, cardless, cashless, and contactless technology and omni-channel engagement also continue to drive our growth. Our myw allet cashless experience is now available at nine properties in three states, and we expect to roll the technology out to 12 additional properties by the end of this calendar year, pending regulatory approval. Guests that use our mobile wallet and who engage with us via online offerings are not only more loyal, but they also play at a higher spend level when visiting a property and generate a higher total value when engaging with us across multiple channels. Given our second quarter results and strong volumes in July, we've decided to maintain our current 2022 guidance range, which we notably increased last quarter to between $6.15 billion-$6.55 billion in revenue and EBITDA of $1.875 billion-$2 billion. We believe that our property-level EBITDA margins are sustainable in this current revenue environment at approximately 37%. Turning to our interactive segment, we experienced nearly 100% year-over-year revenue growth this quarter, excluding the impact of gaming tax reimbursements to third-party skin partners. We remain on track to deliver EBITDA losses of approximately $50 million for the year. The largest portion of the loss will occur in the third quarter due to our contribution to the California sports betting ballot initiative, along with the start of football season in new markets like Ontario and Kansas, and we remain on track to be profitable starting in the fourth quarter of this year. As highlighted on slide 13, our Barstool branded retail sports books are really resonating with the younger demographics and creating meaningful cross-sell opportunities. Our recently converted Barstool sports book in Lake Charles, Louisiana, set a new standard for retail sports book experiences, and we are seeing very encouraging results from the addition. We are on track to open the Barstool Sportsbook at L'Auberge Baton Rouge this fall, and based on our ongoing success in Louisiana, we are optimistic about our upcoming Sportsbook launches in Kansas and Ohio, where we have similar market-leading properties bolstered by large casino databases. With the legislature recently approving sports betting in Massachusetts, the birthplace of Barstool Sports and also home to our Plainridge Park Casino, we're excited to add yet another possible retail launch by the end of this year, and mobile wagering is anticipated in 2023. Turning to slide 14, our early results following the successful launch of theScore Bet mobile app in Ontario on April fourth demonstrate the strength of the brand in Canada and the benefits of our fully integrated media and betting ecosystem. This allows us to drive significantly stronger results and a greater than 50% cross-sell into iCasino. When we acquired theScore, we discussed an interactive roadmap that included theScore Bet working towards transitioning to a proprietary risk and trading platform in the summer of 2022. I'm extremely pleased to share that last month we successfully deployed our risk and trading platform on theScore Bet, which completed the vertical integration of our sports book operations in Ontario. I want to thank all of our team members at theScore who worked so diligently on this project over the last couple years and executed this launch on schedule, allowing us to be live in Ontario with a significantly enhanced product ahead of the fall season. Custom building all components of a sports book infrastructure is a massive undertaking which clearly demonstrates the industry-leading technology, engineering and product expertise that we have in-house at PENN between theScore, PENN Interactive, and our corporate product and engineering teams. This sets us up very well for the future. As we talked about previously, the benefits of a vertically integrated online betting operation are numerous. You'll see on slide 16, we've broadened theScore Bet's offerings and increased event props and in-game wagering options. Second, owning all components of this platform unlocks greater personalization and media and betting integration capabilities, allowing us to create bespoke user experiences that are meaningfully engage and subsequently retain customers. Third, we will realize valuable savings over the next 18 months on third-party platform costs while driving wider margins. Finally, we're operating on a faster, more reliable platform that provides for shorter time frames to build and launch new features. We also remain on track to transition the Barstool Sportsbook in the U.S. to theScore's player account management and trading platform in the third quarter of 2023, and we are working with our existing providers here in the U.S. to ensure a smooth transition process. Post-migration, we will begin to realize the full benefits of our in-house technology stack, including meaningful cost synergies and improved marketing and promotional capabilities. Turning to slide 17 and 18, our PENN Game Studios continues to develop highly engaging content. This quarter, we also introduced 97 new third-party slot and table game offerings across our iCasino platforms, and we have a deep pipeline of future customized and third-party iCasino content for both Barstool and theScore Bet. As you'll see on slide 19, we continue to build momentum on the media front as well, with theScore growing revenues year over year in the second quarter double digits and monthly sessions were up 20%. Barstool has also continued to expand its audience and reach while always looking for new outside-the-box growth opportunities. Looking forward, we believe there is upside for the media business as we begin to realize the benefits of cross-promotion with Barstool Sports and additional monetization opportunities. Before I turn it over to Felicia, I also want to note, as highlighted in our deck, that we were once again very active on the ESG front this quarter, particularly with our ongoing diversity, equity, and inclusion efforts. We recently came in fourth out of 40 gaming companies in the All-In Diversity Project's benchmark DE&I survey. In addition, recently, Forbes Magazine rated us 139th out of 500 of America's best employers for diversity, which is the highest ranking of any publicly traded gaming company. With that, I'll turn it over to Felicia. Thanks, Jay. This morning, we reported second quarter revenues of $1.6 billion and adjusted EBITDA of $504.5 million. Our second quarter 2022 results are particularly noteworthy given that they comp against an all-time record high second quarter in 2021, and despite economic headwinds, our same-store revenues were down just 2.7% year over year and impressively were up 3.5% sequentially. At the property level, our rated segment actually increased 1% year over year and was up almost 4% sequentially. Based on the consistency of our demand trends, as Jay mentioned, we are reiterating our 2022 revenue and EBITDA guidance. As we noted in our press release earlier this morning, we continued our share repurchase program in the quarter. During the three months ended June 30, 2022, we repurchased $167 million of shares at an average price of $30.16 per share under our $750 million share repurchase authorization. Subsequent to quarter end, we repurchased an incremental 3 million shares at an average price of $31.46 per share for an aggregate amount of $95 million. In total, since the inception of our share repurchase program, we have repurchased $437 million of shares at an average price of $35.36, or 12.4 million shares in total, leaving $313 million under our authorization. To put this in context, in October 2021, when we closed the theScore acquisition, we issued 13 million shares at an average price of $77.30. To date, we've almost entirely offset the dilution from that transaction at over a 50% discount. Now moving on to some further details regarding the quarter. In the second quarter, corporate expense, inclusive of cash settled stock-based awards, was $23.6 million. Our cash rent payments to our REIT landlords was $231.8 million. Cash interest on traditional debt was $17.5 million. Cash taxes, net of refunds received, were $44.5 million. Total CapEx was $60 million, of which $58 million was a combination of maintenance and return-generating projects, including hotel room renovations, the three Cs, and our Barstool Retail Sportsbooks. The balance was project CapEx associated with our Category 4 Hollywood York and Morgantown casinos in Pennsylvania. As of June 30, 2022, we had 178 million fully diluted shares outstanding. Regarding certain 2022 modeling metrics, we expect 2022 corporate expense of $98 million, inclusive of our cash settled stock-based awards. Our total CapEx forecast remains roughly $300 million, of which $100 million is return-generating discretionary projects. As Jay will discuss further in a moment, we have many levers to pull to protect our free cash flow in a recessionary environment, inclusive of reassessing our current CapEx plans. We are continually evaluating our project pipeline, and there are various ways we can simultaneously deliver the high-quality experience our guests have come to expect while also remaining prudent with our cash outflows. For cash interest expense, we forecast $116 million for the full year. Cash taxes will be $107 million for the full year net of refunds received. For the full year, our fully diluted shares are expected to be 175 million, which is before any incremental share repurchases. As a reminder, in early May, we entered into a second amended and restated credit agreement with our various lenders, which provides for a $1 billion revolving credit facility that is undrawn and upsized from our prior $700 million revolver, a five-year, $550 million term loan A facility, and a seven-year, $1 billion term loan B facility. The proceeds from the credit facilities were used to repay the existing term loan A facility and term loan B1 facility balances. The transaction was leverage neutral. As of June 30, 2022, we ended the quarter with total liquidity of $2.7 billion, inclusive of $1.7 billion in cash and lease-adjusted net leverage of 4.27x. As a reminder, inclusive of our real estate leases, 85% of our total debt is fixed rate. With that, I'll turn it back to Jay. All right. Thanks, Felicia. In sum, our theme for the second quarter was consistent performance and execution as the competitive environment has largely remained stable. That being said, we recognize the media continues to beat the drum on a potential looming recession, whether organic or at this point, a self-fulfilling prophecy, and economic uncertainty and low visibility obviously creates a challenge in terms of modeling our business. As such, we have provided you with a few slides at the end of our investor presentation that illustrate what the potential impact of a hypothetical recession might look like for us at different revenue levels. We certainly have a lot of experience from dealing with the pandemic over the last two years and learning what levers can be pulled in the case of an economic turndown. In addition, as you can see on slide 23, regional markets, as a reminder, performed far better than the Las Vegas Strip following the 2007, 2008 downturn. Our geographically diversified footprint helps protect against local economic pressures. While the growth in our younger demographic and ability to offer both retail and interactive experiences provide us an advantage against changes in consumer behavior. Finally, turning to slide 25. If we do start to see revenues decline in a meaningful way, we are prepared to offset approximately 45% of the impact through aggressive cost mitigation measures, including adjusting our offerings, labor management, marketing spend, and pricing strategies to help keep costs in line. Bottom line, our strong balance sheet, flexible business model, and disciplined approach to CapEx provide us with multiple levers to maintain free cash flow in an economic downturn. With that, we'll now open it up to questions. Gina? Thank you. If you'd like to register a question, please press the one followed by the four on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the one followed by the three. Once again, to register for a question over the phone lines, please press the one followed by the four. Our first question is coming from the line of Joe Greff with JPMorgan. Please go ahead. Good morning, everybody. Thank you for taking my question. Jay, my question on the land-based casino side of things, referring specifically to slide 11, the database highlight slide, where you talk about the changes in field by age demographics. When you look at that 21- to 54-year-old brackets, so those, you know, younger, first three buckets. How does that win compare to 2019 levels? Then how do you contrast it with that 55 and older, including that 65 and older bracket when you look at it relative to 2019? Yeah, great question, Joe. The growth versus 2019 is obviously much more significant than what you see here. Because remember, when we started to see real significant growth in these younger demographics starting in 2021 versus 2019, we were talking growth rates of 50%, 60%, 70%. Now we're seeing, which has been a pleasant surprise, honestly, to all of us here at PENN, we're seeing growth on top of that significant growth from 2021. To specifically answer your question, in the second quarter, that youngest demographic of 21 to 34, we saw a growth of 90% versus 2019. The 35 to 44-year-old segment was up 55% versus 2019. The 45 to 54 is up 34% versus 2019. Really significant growth. Again, what I'm most pleased with is the growth on top of the growth that we saw in 2021. We actually saw a growth of 10% in that 55-64. 65 and above, of course, is where you're seeing declines, even still not just versus 2021, but of course versus 2019. We're showing a decline of 20% still versus 2019 in that oldest segment. I think that speaks to where we're thinking about upside as we move forward and that oldest segment getting more and more comfortable as time goes post-COVID, post-vaccination rollout, whatever makes people feel comfortable to leave home. We actually, you'll recall in 2021, we were seeing declines versus 2019 in that oldest segment of as high as 40%. It dropped down to 30%. We're down to about 20%. I think last quarter or maybe two quarters ago, we had touched maybe in the high teens down versus 2019. We still have a lot of room to make up when you're down 20% versus 2019 in the oldest segment. Got it. Then the 55-65 and older, those two older buckets, historically, they accounted for what percentage of rate of play and how does that compare to more recent trends? Yeah, as you would expect, it sort of goes in order from youngest to oldest in terms of total theoretical value for us. You're looking at that the oldest segment is about a third of our overall revenue. The 55- 64, you're looking at probably another 25% of total revenue. It's significant. There's a lot of opportunity in that down 20% from the oldest segment, given that it is a third of the database. Great. Thank you, Jay. Switching over to interactive, your comments about being profitable in interactive in the fourth quarter. Can you talk about is that both in OSB and iCasino? Would you be profitable in the 3Q excluding what we would look at as maybe sort of one-time investments? My last question on interactive is, can you talk about the ramp in Ontario and maybe how that ramp compares to other markets in the U.S. and maybe challenges in Ontario that maybe we hadn't maybe contemplated before that whether that relates to converting from a gray market, but love to get your updated thoughts on Ontario. Yeah, I'll share what I can on Ontario in a moment. As you know, Joe, nothing's been shared publicly yet. We're somewhat limited in what we can share, but I'll share what we're capable of. With regard to your first question, which is a great one, yes is the answer. If you look at even at second quarter of this year, certainly third quarter, and then going into fourth quarter, profitability, if you just look at the U.S. interactive business is already there. Obviously, we have some one-time investments. We had the expense of the launch in Ontario, additional investments in our tech stack throughout the second quarter. In the third quarter, you're seeing much of the same because we now are getting ready for football season for Ontario and Kansas, potentially other states in the fourth quarter. I think in the third quarter, most pronounced at the start of football season from some additional investment there. We feel very good about not only being profitable in the fourth quarter in just online casino, but we think in total, we will be profitable in the fourth quarter. It's not going to be a real significant profit, but being profitable in the fourth quarter when the rest of the market isn't, I think is a big accomplishment and something that we feel we have a great deal of confidence in given what we see in the marketplace and what we have anticipated for products and state launches between now and the end of the year. That's the interactive side. I think, look, as it relates to Ontario, we're very pleased with both the online sports betting as well as online casino results. We have a slide in here that sort of walks you through the value of customers that were already in the theScore media ecosystem. Three quarters of the volume that we're seeing are customers that were already part of that ecosystem that have now converted from just media to media and sports betting. The cross sell from sports betting to online casino is greater than 50%. We think we can get that number a lot higher, but I think out of the gate during slow sports calendar season to be over 50% is very encouraging for what we expect to be the busiest sports season coming up here as we get to September and football. We've actually been spending a lot of time with our partners at theScore to better understand. You know, what do we believe the differences might be in Ontario versus the U.S. as it relates to popularity of sports? Even though hockey clearly is more popular in Canada than it is here in the U.S., the number one sport in North America, and that includes Canada, is football. We think NFL and college football season is gonna be robust. In Ontario, remember, in Ontario, you've got a very solid tax rate at around 20%. You get some deductions on that, so call it high teens, and that's for both online sports betting and online casino. I think as it relates to the gray market in Ontario, clearly, the bet365s of the world have been at it for a long time. We've really been focused on bringing new people into the ecosystem and then conversion of media sports media followers into sports bettors. We've been very pleased with our ability to do that. We'll spend a little bit of money advertising maybe on the paid side differently than we have in the U.S. with most state launches. It's really more of just an education thing in Canada because I think a lot of people have been betting with these gray market operators don't realize that they were gray market. We wanna make sure they understand now that, you know, there's a legal market. Most of those gray market operators either already have or are converting over platform-wise to the legal environment, which we think is great. We just wanna make sure they understand that there's more offerings today than there were before April 4. We'll spend a little bit of money there heading into football season. Overall, we are actually doing as well as we thought we would do in Ontario. I think we'll be a double-digit market share player in Ontario, both in online sports and online casino. Again, we don't have public numbers yet, but when it's released, we think that's where we'll be. Great. One quick follow-up here regarding the profitability in interactive. Does the launch of, you know, what might be sizable opportunities for you in states like Ohio and Massachusetts, does that cause you to have a period of investment where that entire segment would post losses before, you know, you resume profitability? We assumed, Joe, in you know the what we just laid out in terms of fourth quarter profitability that Ohio, I think the regulators there have been very clear that the first day of legalization is gonna be January 1st. It's January 1, right? Yeah. We're not building any of that into Q4. Maybe a little bit of paid media leading up to that for a few days or a week or something, but nothing that would be material. Massachusetts, you know, the regulators there have been preparing for this day for many, many months. I think they've got a truncated timeline to going live, which is great, but it may be a retail launch first and then mobile second. We've assumed that, and this could be wrong, but we've assumed that mobile will go live in early 2023. If that moves into late 2022, that could again have some impact on our profitability in the fourth quarter, but not real material. We think we can be profitable, regardless of whether those timelines shift, you know, a few weeks here or a few weeks there. Thank you, Jay. Our next question is coming from the line of Shaun Kelley with Bank of America. Please go ahead. Hey, good morning, everyone. Jay, I just wanted to tackle sort of the operating environment. You know, you had a number of comments in there and do appreciate all the database commentary as well. That's super interesting. Just as we think about like the basics, can you just give us kind of the lay of the land as it relates to the promotional environment, particularly at some of the kinda lower end and maybe in some of the more competitive markets? I'm thinking places like Pennsylvania, St. Louis, maybe in Mississippi. You know, just areas like that where we have started to hear about promos coming out or increasing. Could you just, you know, kinda compare that to, you know, is that happening, but destination is offsetting that or, you know, some of the destination properties are offsetting that or is that maybe not as big of a deal as some of us make out of it? I would start by saying the latter. I think a lot's being made out of this and, a lot about, you know, what the promotional environment is. I think if you look at Pennsylvania specifically, there's a lot of moving parts because you have, a number of Category 4 satellite casinos that have opened over the course of the last 18 months. In Pittsburgh, we have two, one in York, one in Morgantown. You're seeing some shift because new supply has entered the marketplace, and I think the existing operators or existing properties are trying to figure out what is that right mix of reinvestment now that there is more competition. Pennsylvania to me is a one-off. With regard to Mississippi, St. Louis or any of the other markets, and each of these markets I think are unique in a variety of ways. We're not seeing or feeling a heightened promotional environment, in Mississippi or in St. Louis. We may have a property that just launched a new restaurant or two, and so you might reinvest a little bit more for a couple of months to showcase your new amenities or your new, renovated hotel product or a new sports book or something like that. But I think you can see from the margin stability in the land-based business. You know, we declared, late in 2021 that we felt that 37% property-level margin is something that you could bank on at PENN, and we've now delivered that four quarters in a row. If the promotional environment were what's been talked about, I don't think you would see the consistency in margin delivery, the way that it's being delivered, not just by us, but by the competitive set as well. Great. Just my follow-up would be, you know, you gave a little color on the sort of unrated segments and I believe that being down, you know, year-over-year, given just some of the more entertainment options and stimulus. Is that level of play still up from 2019, though? Just kinda help us get a sense of how did that trend also just across the quarter? Is it still deteriorating, or has that sort of leveled off just as we've lapped maybe the bulk of some of those payments, you know, that occurred a year ago? Yeah. I think there's a lot of variables, Sean, in that in the answer to that question. I think there's a confluence of factors. We tried to highlight a few of them at the beginning. First and foremost, our property teams and our interactive teams have done a really great job of moving unrated players into the My Choice database ecosystem. So that's a big part of it, is we're just continuing to move people out of unrated and into rated. If they're not rated, you don't have a relationship with them, and it's hard to cultivate and build on that if you don't know, you know, their name and what their email address is or their cell phone number to be able to deliver push notifications, et cetera. That is a big piece of it. No doubt, there was a lot of money in the system from the stimulus payments that went out in the second quarter of 2021. I don't think you're gonna find a business out there that had more sort of unrated free business coming through than they ever did in 2021, and so you'd naturally see some drop-off in 2022. Of course, there's more options in terms of where to spend your entertainment dollars and your discretionary time. Movie theaters and restaurants and bars and nightclubs and sporting events and concerts and all of those things are sort of back to where they were or close to it versus 2019 here in 2022, and they weren't there yet in 2021. I think, you know, as you look at it, year-over-year, it was an expected fall off in unrated. A lot of it is because we're moving people over to the database, which is great. The good news is, Sean, if you look at database trends, really only with the exception of the 65+ age segment, which is still down 20% versus 2019, every other age, all worth groups, rated and unrated business is still up significantly versus 2019. It really is, for us, good news story everywhere, except we have to continue to, you know, chip away at the 20% decline at the 65+ age group. Very clear. Thank you very much. Our next question is coming from the line of Steve Wieczynski with Stifel. Please go ahead. Hey, good morning. This is Jeff on for Steve. Thanks for taking the questions. I wanted to start on the brick-and-mortar business and maybe follow up on Sean's question in a slightly different way. You know, as you look across the various markets, are you sensing any weakness anywhere just given potential belt tightening amidst higher gas prices and other inflationary pressures? We've heard Mississippi, Louisiana, Pennsylvania all mention this earnings cycle, but just curious what you're seeing for your portfolio specifically. Yeah. We get this question a lot, Jeff, and I think you look at the monthly state-reported numbers, and you'll see that Louisiana, for us, is one of your states that you pointed out there, is the top-performing state in our portfolio. We're not feeling that. I think the way that we look at it is a little bit less on geography and more on what is the market, what is the competitive set in that market, and where does your casino amenity package compare to the rest of the competition. It's not so much geographic. What I would tell you is that the properties that we have in the portfolio that are maybe the oldest, the most dated, that have the most limited amenity package are the ones that are seeing some softness at the lower worth segment, not surprisingly. The good news is the vast majority of our assets across the country are quality assets, and many of them are on the newer side, you know, built, opened, acquired in the last 10 years. We're seeing that those properties where the core demographic is maybe a mid-worth to a higher-end customer, continue to be robust. I don't know how else to explain it. I know you've heard this from others who have reported already on second quarter earnings, but we're just not seeing the softness at the vast majority of our properties and the vast majority of our markets. There's a couple of pockets of softness, and again, it's a you know maybe a more limited amenity package, and it's lower worth customers, and it might be some fall off in unrated play. The consumer continues to look healthy. You know, one thing that we've talked a lot about internally, and I don't know that it's really sort of analyzed this way, but if you assume that we're either in or there is a recession looming, we're about to head into one, I do think it makes sense to take a step back and think about, you know, the fact that no two recessions are identical. If there's a lot of comparisons right now, understandably, to 2007, 2008, but if you remember what was happening in 2007, 2008 and the impacts of what was happening at a macro level to the consumer, to the average family, very different than what you're seeing today. In 2007 and 2008, you had financial market turbulence. You had real estate home value turbulence, and home values were dropping significantly at a very rapid pace. We had unemployment really starting to skyrocket during that 2008, 2009 timeframe. All of those things impacted people's wallets. It impacted their balance sheet. What we're seeing this time around, clearly there's inflationary pressure, and so costs of living are going up. You're seeing unemployment still at near, you know, multi-decade lows. You are seeing wages and income levels grow, maybe not completely keeping up with the pace of inflation, but pretty close. You're also seeing home values that are holding steady, if not continuing to grow across the country in most markets. The things that actually impact the consumer and how they feel, and we are seeing a shift in spend today from goods to services, and I think you're seeing that in the results from lodging companies and casino gaming companies. I'm not sure that we should all expect whatever we're in today to be like what we saw and experienced in 2007, 2008, 2009. There will be differences. There's obviously geopolitical noise out there this time around that wasn't there in 2007, 2008. We're seeing a healthy consumer, and we're seeing a consumer that still wants to get out. They wanna spend money. They wanna have fun. We just closed the books preliminarily on July. We had a great month in July. We don't have much to share in terms of looking out that concerns us, especially in regional markets. You don't have, you know, hotel bookings months in advance. Everything that we're seeing on a daily basis, both in gaming spend and non-gaming spend, we feel really good about. Trends are healthy. Margins look really good. Interactive business continues to ramp. Our core business on the brick-and-mortar casinos, very stable margins are good. That's a long answer to a simple question, but I think good just to provide the context. That's extremely helpful and was a perfect segue. You answered part of my next question there towards the end. You know, agreed on all accounts on the fallacies of comparing to 2008, 2009 with what's going on right now. Just wanted to focus more on say we do run into a recession, focus more on the cost side of things because the analysis you put forth on, I think, it's 45% of the revenue decline be able to be mitigated with cost reductions is really interesting analysis, really encouraging. Can you just provide more color on your methodologies where you estimated, you know, that 45%? Is that mostly comparing to what you experienced during the COVID shutdown? Just really curious what the levers are from a cost perspective if you're kind of working through more of a, call it a spend per visit decline versus more of a visitation decline, if that makes sense? It does. What I would tell you, Jeff, on that one is, this was not us just taking a swag. This is weeks of bottoms-up analysis and, you know, taking our learnings. Honestly, from the 2007, 2008, 2009 timeframe, which many of us here at PENN were, you know, operators in the business doing things, back then that we thought made sense and turned out not to make sense. You know, I think in 2007, 2008, early 2009, we, in a lot of cases, tried to spend our way out of the softness, and that was a disaster to EBITDA and margins. That's. I don't think you're gonna see that repeated. There were a lot more gaming companies out there with different strategies in public and private, and everybody fighting for top-line market share. I think there's an environment today where there's much more of a focus on growing your profits and/or growing your revenues profitably. That seems to be across the board as you listen to these earnings calls. I think people are definitely thinking about going into whatever we're in or about to go in and remaining disciplined and remaining very thoughtful and prudent and judicious in the decisions that they make. I think we learned a lot from that timeframe. We learned a lot, obviously, when COVID hit, and we had to shut down the casinos and slowly reopen as to what was really a nice to have versus a must-have in terms of the amenity mix, what customers were willing to accept for a product offering during maybe a more challenged time versus a typical time. The other factor, Jeff, that I think sometimes gets overlooked, and it's all about operating leverage. We have, I think, as a company, done a great job for a very long period of time of maximizing margins and not chasing unprofitable business. But we also have, because of our diverse portfolio, we have the highest blended gaming tax rate in the industry. That's challenging when times are good to continue to grow your margins maybe to the same levels that other companies can because maybe most of their assets are in markets like New Jersey or Nevada with tax rates at 10% or below. But when your average blended or when your blended tax rate is closer to 30%, you have, you know, less negative operating leverage maybe than other companies do. We obviously have levers we can pull that are, we're more knowledgeable, we're more experienced, we're more battle ready, I think, going into something like this than we were in 2008, 2009, and certainly more than we were heading into COVID. Extremely helpful color. Thanks very much, and congrats on another strong quarter. Thanks, Jeff. Our next question is coming from the line of Barry Jonas with Truist Securities. Please go ahead. Hey, guys. Wanted to start around labor. Any updates in terms of what you're seeing from labor shortages or wage growth? Thanks. Yeah, not a whole lot, Barry. If anything, I would say trends are getting better every day. We're seeing more applications come through for open positions across most of our markets. There's still some pockets of wage pressure, certain roles, certain positions, both on the land-based side as well as on the interactive side. But I would say we're in a much better environment today than we were even two months ago, and certainly a lot better than we were at the beginning of 2022. It was pretty dire, and we couldn't get applicants to come through and apply for roles for dealing school. You know, properties were paying plus toke rates somewhere close to $100,000 a year, and people wouldn't apply for these roles, and we would train them for free. You know, put them behind a table in a couple of weeks. We're not seeing that now. We're seeing applications start to come through. We're seeing less wage pressure, and that environment certainly is improving. That's great. Was hoping to get a little more color on the three Cs specifically, maybe if you could elaborate on your full vision of enabling omni-channel engagement, you know, when you think we could see everything in full force as well. Yeah. We haven't shared a whole lot in terms of the early results. We're very encouraged. We continue to see more and more people sign up for our MyC hoice app as well as our my wallet capabilities. You know, we're live in three states. We wanna get to a level of scale before we really start sharing data publicly. Again, very encouraged, and we're seeing higher frequency of visit as well as higher spend per visit with those that are engaged with us in multichannel and/or our MyC hoice app and my wallet capabilities. I would say that in terms of the vision, you know, we, one of the many reasons why we decided to acquire theScore, that it's a technology company, and they have amazing technology team, combined with our team at PENN Interactive and our team here at corporate on the engineering and product side. We envision down the road, I wouldn't say it's a 2023 event, I would say it's likely a 2024 event, that we have one wallet across all of our offerings, both retail and digital. For now, we have wallet capabilities, but they're separate, so you'd have to have a digital wallet for interactive and a separate digital wallet for our land-based properties. We would anticipate being live pending regulatory approval with three Cs across all of our businesses, land-based, and having that wallet functionality across all of our different business verticals. It's gonna take us a little while to get there, but we're already starting to see a lot of the benefits and the upside to this technology enhancement. Great. Thanks so much, Jay. Our next question is coming from the line of Chad Beynon with Macquarie. Please go ahead. Morning. Thanks for taking my question. In terms of the cash on the balance sheet at the end of the quarter and the undrawn revolver that you talked about, can you help us think about capital allocation? Within that, can you remind us on the Barstool opportunity to take that in-house in the next 12 months? Thanks. Yep. How are you doing? Thanks for the question. You know, look, as we've said in the past, we're, you know, really proud of our strong balance sheet. We ended the quarter with lease-adjusted net leverage of 4.27x, and, you know, we're well more than halfway through our share repurchase authorization in just seven months. You know, the cash on our balance sheet gives us a lot of opportunities to do a lot of different things. You know, we obviously think the market is underappreciating our valuation. You know, again, we're in the fortunate position to be able to take advantage of that dislocation. As we look ahead, we'll continue to monitor market conditions and remain opportunistic with our share repurchases while also being in the really favorable position of being able to continue, weighing those buybacks against other opportunities that we may face at any given time. You know, we're really happy with our leverage, and I'm sure, you know, in your modeling, you can see what our free cash flow generation is over the near term and how that is organically delevering, which continues to, you know, build up our balance sheet. You know, we'll continue focusing on maintaining our low leverage. We'll continue to focus on taking advantage of what we think is very favorable market conditions, and we'll also continue to look at growth capital opportunities. Great. Thanks, Felicia. Within the analysis that you talked about with operating leverage, can you also remind us on the lease agreements? I don't believe you're exposed to any CPI inflationary pressure like some other companies in the space, but can you just kinda remind us on the escalators how that'll look over the next five years? Yeah. You're absolutely right, Chad. We don't have fixed escalators on the majority of our leases. You know, for those of you who aren't familiar, we do provide the detail on that in our 10-Q. In a nutshell, for our master leases, our PENN and Pinnacle master leases, which are our largest, we have three components of our rent. It's land base, percentage rent, and building base. You know, the percentage rent is subject to adjustments every five years under the PENN Master Lease and every two years under the Pinnacle Master Lease. Except for Columbus and Toledo, which is adjusted monthly by the change in revenues. Our building-based rent, which is the largest part, is subject to an annual escalator up to 2%, but that's subject to annual adjusted revenue to rent ratio of 1.8 to 1. They're not fixed, and they're not tied to CPI. Perfect. Very helpful. Thank you very much. Sure. Our next question is coming from the line of David Katz with Jefferies. Please go ahead. Hi. Good morning. Thanks for taking my question. I covered a lot of ground, and I just wanted to touch on one of the slides in the deck, slide 19, where you talk about the media performance. I think you do have kind of the interactive segment in your press release, and I'm trying to unpack that just a little bit, in terms of what the media, you know, opportunity is, what the media productivity is today, and where it could really go. I think this slide refers to theScore, but there's obviously some Barstool opportunity there also. If you can just sort of help us with that media piece. I think that segment has about $155 million of revenue, and there's a tax gross up. In there that's 55 or so. That's what I'm trying to get at. Yeah. I'll be able to help you get at some of it, David, probably not as helpful as you're hoping, only because we currently don't own 100% of Barstool. We own 36% as an investor, and so you have 36% of cash flow flowing through, but we don't reflect any of their revenue. It's a bit noisy. As it relates specifically to theScore, their revenues were public, obviously, before we acquired them, and we're talking double-digit revenue growth on that base of revenue. We experienced the same thing in Q1, so we feel really good about the momentum. I would say in terms of a more detailed outlook as to what this media segment within interactive might look like, I would say stay tuned. Once we close on the full acquisition of Barstool in Q1 of next year, we'll probably show you a lot more detail, and we'll be able to show you on a combined basis what Barstool and theScore Media business looks like. I think, not just as it relates specifically to the P&L, but how we're thinking about the ecosystem that we're continuing to build out and, different products and services and ideas and, monetization opportunities with that audience down the road that we've been working on for some time now and are very excited about. If I can just follow that up and maybe give us a sense for how big that can become one day at some undetermined future, you know, in the total picture. Is it something you expect we'll be modeling out separately at some point in time? I do, David. I think that probably makes sense at some point down the road. We will not be doing that in 2023. We would expect media to be blended in with our interactive businesses within the interactive division. But I could see a day where we're breaking those two out separately. You know, look, the way that we think about the media asset today is, you know, these are high growth businesses. These are businesses that continue to attract new audience. I think it's incumbent on us to think about, you know, how we harness all of that in a way that creates long-term value and monetization opportunities. Again, we have a lot that we'll share once we close on the Barstool transaction early next year. I think about those media businesses today, you know, it's a lot about cross-sell and monetization within sports betting and online casino. I think there's gonna be other cross-sell and monetization opportunities down the road. We have a lot in front of us, obviously, with sports betting and online casino as we continue to ramp and more states legalize Ontario ramp, all of that. Those will not be the only places where we're planning to grow our overall earnings from the media assets that we've acquired. Okay. Helpful. Thank you. Okay, we have time for one last question. Our next question is coming from the line of Ryan Sigdahl with Craig-Hallum Capital. Please go ahead. Great. Good morning. First, I appreciate the slides, especially the recession considerations. I think those were nicely done and helpful. Curious on Ontario, I know you can't give a lot of detail there, but any qualitative statements, I guess you can make on the comparison before and after the tech transition? Still really early, Ryan. It's just such a slow time of year sports-wise. We obviously are gonna be able to offer a lot more in terms of betting options and personalization as it relates to the experience on the app as well as our CRM activities. I think next quarter, we'll be prepared to probably answer that question in a thoughtful way. When your only major sport is regular season baseball, there's not a whole lot to share in these first few weeks. We'll know a lot more at the onset of football season, September, October, and on our next call, which will be in early November. Maybe just to follow up, any glitches or outages? I guess we haven't heard of any, so I think no news is good news in that respect, but anything to call out there? Well, I think you just jinxed us, Ryan. Thank you. No, it's been great. Sorry. I'm knocking on wood as I answer that one. But it's gone as Benjie Levy said the other day, it's gone better than he had even hoped in best case scenario. So far so good. Again, we're seeing really nice volumes up there, but it is baseball season, and so we wanna... The nice thing about this roadmap and the timeline that we put out in terms of critical milestone dates is now we're live on our entire proprietary tech stack in July 2022, and we get to not just work on the migration back to the U.S., we get you know 12, 13 months to do that, but we also get to really put that tech stack through high volume intensity through football season and March Madness and do that in an environment where we've got you know significant users and significant volume before we bring it back to the U.S. and convert across all of our platform, all of our state platforms here in the summer of 2023. So far so good. We'll continue to keep you updated once we start football season. Thanks, Jay. Thanks, Ryan. We have no further questions at this time. I'll be turning the call back to you. All right. Appreciate everybody's time this morning for dialing in, and, have a great rest of the summer. We look forward to speaking with you for third quarter results sometime in, early November. Have a good one. That concludes the conference call for today. We thank you for your participation and ask that you please disconnect your lines.