Penn National Gaming Inc

NASDAQ:PENN

Earnings Call Transcript 2021-Q2

[Operator]

Greetings and welcome to the Penn National Gaming Second Quarter Earnings and Acquisition of THE SCORE Media and Gaming Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions]

I would now like to turn the conference over to Joe Jaffoni, Investor Relations. Please, go ahead.

[Joe Jaffoni, Investor Relations]

Thank you, Rita. Good morning, everyone, and thank you for joining Penn National Gaming's conference call to review the company's 2021 second quarter results and today's announcement that Penn National has agreed to acquire Score Media and Gaming. There are investor presentations on the Penn National website for both the quarterly results and the transaction news. We'll get to management's presentation and comments momentarily as well as your question-and-answer, but first I'll 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 terminologies 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 discussion 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 announcements 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 National Gaming 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. And 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. Thank you for your patience, with that.

And now it's my pleasure to turn the call over to Penn's CEO, Jay Snowden. Jay, please go ahead.

[Jay Snowden, Chief Executive Officer]

Thanks Joe. Good morning, everyone. Thanks for joining us for our second quarter earnings call and I would say, more importantly, the exciting announcement of the acquisition of Score Media and Gaming.

I have with me here in Wyomissing, our CFO, Felicia Hendricks; our Head of Operations Todd George; as well as other members of my executive team. And later on John Levy, Founder and CEO of theScore will join me to discuss our exciting new partnership that we announced this morning. We'll also be joined in a bit by Barstool founder, Dave Portnoy and Barstool Sports CEO, Erika Nardini, to get their perspective on the deal as well.

But first I'll begin today's call with the highlights of our record financial results this quarter, which exceeded our pre-announced ranges. This is a reflection of the ongoing recovery in regional gaming and it speaks more specifically to the outstanding job that Todd and his operating teams, both here at corporate and at the property levels, are doing to help drive our continued margin improvement and boost higher spend per visit from our existing 55-plus age group, while finding new ways to attract younger patrons looking for alternative entertainment options.

We also saw impressive revenue growth and near breakeven EBITDA results across our Penn Interactive segment. We're preparing to launch the Barstool Sportsbook app in four or five more states by the start of NFL season next month. And by the end of this calendar year, we expect to be live in at least 10 states, while also introducing several new features to the app, such as same-game parlay and shareable bet slip, which we're really excited about.

With greater operating scale and leverage, improved products and unique value-creating marketing strategies, we believe we are extremely well positioned for a strong fall, as we roll into Barstool Sports' favorite time of the year, football season, which provides a nice segue to our pending acquisition of theScore, which is the number one sports app and sports media name in Canada and the third most popular sports app and sports media name in North America.

When we add theScore's unique integrated media and betting platform and modern state-of-the-art technology to the massive audience of Barstool Sports and its wildly popular personalities and content, we'll be creating North America's leading digital sports content gaming and technology company.

Under the terms of the agreement, which have been unanimously approved by the Boards of the Directors of both companies, we'll be acquiring theScore for approximately $2 billion in cash and stock. theScore's shareholders will receive $17 in cash and 0.2398 shares of Penn National common stock for each of theScore share, which implies a total purchase consideration of US$ 34 per theScore share based on Penn National's five-day volume-weighted average trading price as of July 30 2021.

We are uniquely positioned to seamlessly serve our customers with the most powerful ecosystem of sports, gaming and media in North America, ultimately creating a community that does not exist today.

This transaction will allow us to provide state-of-the-art mobile sports betting and iCasino with highly customized bets and enhanced in-game wagering opportunities along with highly engaging personalized sports and media content and real-time scores stats and videos.

We believe this powerful new flywheel will result in best-in-class engagement, retention and loyalty and this larger cross-promotion ecosystem will provide us with multiple growth channels that transcend our current business verticals.

In the near-term, we'll just be scratching the surface of where we can ultimately take this company. The transaction also provides us with a path to full control of our own tech stack with a deep pool of engineering talent.

theScore has developed a modern player account management system and is currently in the process of finishing up the development of an in-house managed risk and trading service platform, built specifically for the North American market that should lead to significant savings in third party platform costs, and more importantly allow us to broaden our product offerings, providing the missing piece for operating at what we believe will be industry-leading margins. In fact we expect to realize margin improvement of 500 basis points or more over time for Penn Interactive.

But more important than cost synergies, we believe the transaction will provide us with significant incremental revenues, not just in Canada but also in the US. The financial benefits of this transaction are very compelling.

Despite significant planned investments in technology and new launches, we anticipate that the acquisition of theScore will provide adjusted EBITDA accretion by year two and an incremental $200 million medium-term adjusted EBITDA opportunity with a $500 million incremental long-term adjusted EBITDA upside.

Our perspective is that operators that have achieved early online market share have done so primarily through first-mover advantage leveraging existing customer databases and significant paid media spend. We believe the long-term winners will be defined by best-in-class products, bespoke content efficient customer acquisition, multi-platform reach and broad market access, all of which we have in spades.

Before turning it over to John, I want to speak for a minute about our excitement to be entering the Canadian gaming market, which represents a compelling revenue growth and talent-acquisition opportunity.

Canada and particularly Toronto is known for its deep pool of world-class engineering and technology expertise, and we and theScore intend to tap into that pool to expand theScore's tech team there as the business continues to scale. I also want to reinforce that we intend to operate theScore as a stand-alone business, much like we have with Barstool which will remain headquartered in Toronto.

Finally, it goes without saying that this transaction reflects the deep respect we have had for theScore brand over the years and what John and his family have created. We have known the Levy family for years and like our Barstool acquisition, we don't want to come in and change who they are, which is what has made them so successful.

A large part of what we love about both Barstool and theScore is their authentic voice, their scrappy nature and entrepreneurial spirit. We want theScore to keep on doing what it does best and are proud to have John and his entire team and family bring their unique perspective to our Penn National family. This is going to be a long-term partnership.

So with that, I'd like to turn it over to John Levy.

[John Levy, Founder & Chief Executive Officer, theScore]

So, thanks very much, Jay. And as Jay mentioned, we've been strategic partners with Penn in the US since 2019. And over that time, it's been great getting to know Jay and his team, who really do share the same culture and like us, are proud to be disruptors. We quickly realized that when we shared a common vision and approach related to a rapidly growing opportunity in media gaming all across North America.

We've admired how Penn has strategically built their business and when this opportunity arose it was clear that there was a natural alignment. This deal brings together two companies who've developed large and loyal customer bases. We can't wait to join forces with Penn and leverage our respective strengths to create the most powerful sports, media, gaming and content company in the market.

We will combine to create a first-of-its-kind company, which brings together world-class technology, highly engaging sports content and unparalleled reach, enabling us to uniquely serve users like no one else can. Penn obviously has a massive retail footprint across the US, but their approach to online gaming is also equally appealing. Like us Penn has made a strategic decision to build their gaming operation around a strategy that originally integrates media and betting. Through Barstool leveraging their hugely influential content machine it's been apparent how the powerful strategy -- how powerful the strategy can be.

Our product-led approach to integrating media and betting with technology accomplishes the same objective through an entirely complementary way. We look forward to collaborating with Dave, Erika and Barstool team as we leverage our unique brands large audience and respective approaches to serving sports.

Now I'd also like to thank our team at theScore for helping us build this truly incredible organization. For years the team maintained a dedicated focus and attention to understanding how to empower the fan experience. That effort has driven the innovation and ultimate success across all of our verticals, sports, media, esports and gaming.

This concentrated unified mission took us head first into the regulated gaming industry going the path less traveled for media companies and actually becoming the sportsbook. We knew there was a better way to serve sportsbook betters. In a few years we've built an innovative technology-led integrated media and gaming operation that has poised us for success across North America including the highly anticipated upcoming rollout of commercial sports betting right here in our home turf. This enormously potential and demonstrated ability to execute that has excited our partners at Penn and their shared vision of where we can take it has excited us. That very much includes the opportunity here in Canada.

With Penn's support, we will continue to invest in building our Canadian operations, growing our footprint and expanding our workforce including our technical capabilities. Mobile technology has always been the foundation of our organization since we began with apps on our flipped home. We have built it into a world-class technology platform and will continue to pioneer on that front setting the standards for digital sports media and gaming.

Now with Penn, we have the opportunity to leverage it on a much larger scale. This combined entity truly creates a unique market leadership position across media gaming and technology and we could not be more excited with the opportunity ahead.

On a personal note, I'd like to thank Penn for being a great partner these past few years and express how much Benjie and I look forward to continuing to work with them and now obviously in a much closer capacity as we continue to head up theScore as part of this new combined company.

With that now I will turn it back to Jay.

[Jay Snowden, Chief Executive Officer]

Thanks John. Now I'd like to turn it over to Dave Portnoy and Erika Nardini to say a few words as well. Dave it's all yours.

[Dave Portnoy, Founder, Barstool Sports]

Yes. Thanks Jay. So, I'm super excited and things come full circle. I've told this a little bit, but even before we were involved with Jay and Penn, when the Chernin guys invested as the first company really the only company. When they said is there anybody else that you guys think you're synergistic with that could really grow exponentially what you're doing my answer was theScore.

So Erika and I met with John way back and had a meeting. We didn't have the resources at the time to pull it off. But I think what makes Barstool successful and what has made the Barstool and Penn relationship work is, we really know the market. We know the gambling space we know sports gambling. And I've been a user of theScore for -- I don't even know how long I was trying to check when I installed the app on my phone. It's got to be 10, 15 years.

So we're super excited. I think it's so synergistic with what they do and what we do and continues the belief that I know Jay and I have -- John and I have which is controlling the media and having the entire ecosystem where people get scores they get info and they can also place the wager. It just fits so perfectly. And I've said all along, the company as everyone's spending that I would want to work with is theScore.

So, it's been a long time coming, but we just see the world the same way and continues on the belief of the convergence of media, sports, gambling and the next step. So I couldn't be more excited. It's a company that I know well and have believed in and really just fits the vision of where we want to go. So super excited.

[Erika Nardini, Chief Executive Officer, Barstool Sports]

And then this is Erika, just jumping on top of that. We have so much respect for John his entire family and what theScore has become and the business they've created. Dave is exactly right. The first company we met with after PASPA was repealed was theScore. We have such a profound respect for what they've created in Canada. I'm so blown away by how they think about community, the type of tech that they're creating, the way they're innovating around information and betting. And we believe that those things coupled with PENN's strengths and footprint and our brand can create a company that will have an incredible amount of synergy. We also couldn't be more excited to be partnering with a Canadian company and we're ready to go to the moon.

[Jay Snowden, Chief Executive Officer]

Awesome. Thanks, Erika. Thanks, Dave. Well let me -- before we open it up to questions let me just close it out by reiterating a few things. And I think you heard it loud and clear from John Levy, from Dave and from Erika that to all of us there's really a shared vision of where we're headed and it's not really where everyone is today. We look at this transaction and this partnership as it's not just about sports betting, it's not just about media, it's not just about tech or gaming. It really does transcend any one of those individual verticals from our perspective. And to really become best-in-class and have a really successful flywheel, you have to have the best and widest variety of content, a modern tech platform, omnichannel assets, smart engineers, best-in-class marketers. And we believe strongly theScore Barstool Sports and Penn National combined check every box. So we're here today to announce that we're doubling down on the belief that we have the best strategy. And today with this partnership, we'll be making the moat that we've built wider and deeper. So that's what we're here to talk about excited to answer your questions.

And with that, Rita, we'll hand it over to you.

[Operator]

Thank you. [Operator Instructions] Our first question comes from the line of Joe Greff with JPMorgan. Please proceed with your question.

[Joe Greff, JPMorgan]

Good morning, everybody. My questions have changed going into today. So obviously, it's all related to today's theScore acquisition news. First question related to this Jay, you referenced in the slide deck and the press release cross-marketing or rather cross-promotions between theScore and Barstool Sports. Are you planning to lead with one over the other depending if you're looking at the US markets versus the Canadian market? How integrated will the brands be on the front end for consumers?

[Jay Snowden, Chief Executive Officer]

Yeah. No great question, Joe. And as you can imagine, we've spent quite a bit of time talking about this as a group. We actually had really good productive discussions with the Levy family and Dave and Erika and Big Cat a couple of weeks ago in New York. And there's really strong consensus that leading with theScore brands in Canada of course makes tremendous sense and we're all excited to do that. We think that much of the Barstool audience is already familiar with theScore. I know Dave and Dan they were super excited and you heard Dave talk about it. They've been following theScore and they've known the Levy family and have been using their app over ESPN or any of the alternatives for ever. And so leading with theScore brands in Canada makes a lot of sense. And of course, there'll be a lot of cross-promotion and really get an opportunity to market to that Barstool audience that we are also theScore leading in Canada.

And I think in the US, Barstool of course is a super strong brand. It's going to be our lead brand in the US. But we do have nice optionality. We have a number of states where theScore has already launched and they're continuing to build out their market share. I think they're live in four or five states already in the US. And so we've got a lot of options. I think that what's most exciting Joe from my perspective and I think that John and Erika and Dave would all echo this that we feel like we have two of the premier sport media brands in North America. And our business model is a bit different than everyone else. I sort of look at what the competitors are doing in this space and it feels to me like a rental model. And we're planning to buy and to build and to do something that's really differentiated, but it's built for the long-term. We have built-in structural advantages that we've talked about before whether it's access and now it's totally vertical tech stack integrated media and betting capabilities and engagement and we've got two amazing brands. So we'll see how this plays out. But for sure the lead brand in Canada will be theScore and the lead brand in the US will be Barstool.

[Joe Greff, JPMorgan]

Great. Thank you. And then on slide 17, you have some illustrative scenarios for market share and revenues and margins and that's for North America as a whole. Within that, what are your underlying assumptions for the Canadian market and market share, which I would imagine given theScore's presence the fact that it's the hometown team and its historical presence there would give you a higher market share than that 10% top three that you've been targeting in North America?

[Jay Snowden, Chief Executive Officer]

Yeah. So if you actually flip to slide 18 and 19, you'll see that we estimated a North American TAM of $30 billion, which is down the middle their TAMs are all over the place and there's still a number of pending state and province opportunities between the US and Canada, and when we say $30 billion that's combined sports betting and iCasino. And so we've laid out a number of scenarios there of what -- in terms of what your margin improvement opportunities would be at 500 basis points if your market share were anywhere between that 8% and 19% range. We've always been targeting that midpoint of 13%. We think that that's something that is very achievable for us and we think that's achievable for us in the US and in Canada.

So I think that's a good baseline Joe. Is there upside to that? We would feel good about what that potential is down the road, especially once we have full control of the product roadmap and we are 100% on our own tech stack both in Canada and in the US. So I think those two slides are the ones to really reference there. And, of course, not just from a market share perspective and a margin improvement perspective. But I think overall TAM and where we expect to be market share-wise it's laid out quite well. So you've got -- the nice thing about this transaction, you've got natural easy-to-calculate cost synergies.

And then I think it's a lot of fun when you start focusing on the revenue potential because in all of the assumptions that we've made here on these two slides, which are I think quite exciting there's nothing in there around opportunities in media. There's nothing in there about opportunities in other verticals where we think this company meaning, Penn National is going to be focused down the road. What we're building here again really transcends any of the verticals that we're currently in. It's much bigger than that.

[Joe Greff, JPMorgan]

Great. And then two final quick ones here. There's a reference to EBITDA accretive in year two after a period of investments. What level of investment, are you thinking about right now once the deal closes in that first year or two? And then you referenced in the medium term $200 million of incremental EBITDA. How much of that comes from increased share in Canada versus the margin benefit just from bringing the tech stack in? I know you have it broken out between $90 million and $110 million. I think that $90 million includes other things beyond just the benefits of controlling the tech stack.

[Jay Snowden, Chief Executive Officer]

Yeah. So from a synergy standpoint and that's laid out pretty well, I think on slide 17, you can see the breakdown of where we see cost synergies versus revenue synergies. So it's sort of like a 40% of cost synergies and 60% of revenue synergies, I think is the best way to look at it. And then can you remind me of your first question Joe?

[Joe Greff, JPMorgan]

Just in terms of how much of that $200 million or of the $110 million of the $200 million comes from what you think the opportunity is in Canada with enhanced share with theScore in the fold?

[Jay Snowden, Chief Executive Officer]

Got it. Yes. And then -- yeah, and you had also asked I believe about what costs are we in -- what are the investments over the course of the next year since we said EBITDA accretive for year two. And we're going to be I guess taking a step back. There's a couple of things coming up for football season this year and then soon thereafter that are really exciting for us. One, we're going to have real scale for the first time. Last year football season week one, we were live in zero states. We squeezed in week two in Pennsylvania and we got into Michigan at the very, very end of last football season.

Football is all of our favorite sports at Penn and at Barstool. And I won't speak for theScore, but it's probably somewhere between football and hockey. But I would say that for us to have scale this year is a big difference. And so, we're going to be investing, I think more nationally from a marketing standpoint.

And you've been reading about some of those sponsorships and actually announced last week Dave and Erika spoke about not just being a key -- the title sponsor, but also having distribution rights and broadcast rights as it relates to the Arizona Bowl. So, there are some things that we're able to do when you have scale that you can't really do when you're only live in one state.

Dave has a golf match coming up with Brooks Koepka in September. We also are going to be the lead sponsor for the Jake Paul fight, that's coming up at the end of August. And what's nice about each one of these opportunities and the ones that we certainly look for is that it's not just going to be Barstool logo here or theScore logo there.

These are deeply integrated. We're able to use our content creators able to use Dave and Big Cat and others at Barstool to not just put the name on it, but also to really make it an entertaining experience when people are tuned into watch or listen to these events. So I think you're going to see that there's a lot of investment going into our marketing capabilities to widen the funnel going into football season, so we can continue to grow our market share.

Admittedly, the last several months, our focus has really been on just getting ready to go live in, four or five more states by football season kind of a slow sports calendar, but we're ramped up and ready to go for football season at Barstool.

I know theScore is ramped up and ready to go and we think Ontario is going to be ready to go live in sort of December-January-February time frame. So, there's going to be clearly significant investments in Ontario for theScore as they get ready to launch. And then, we're going to continue to invest in improving the products and capabilities that we have here in the US as well as in Canada.

So there's a lot of investment going in. And even with all that said, because of our built-in structural advantages, we think we'll be probably breakeven from the Penn Interactive and theScore combination in 2022. And then, you'll see that EBITDA ramp really start to hockey stick in 2023 and beyond.

[Joe Greff, JPMorgan]

Thank you very much. Good luck.

[Jay Snowden, Chief Executive Officer]

Thanks, Joe.

[Operator]

Thank you. Our next question comes from Bernie McTernan from Needham & Company. Please proceed with your question.

[Bernie McTernan, Needham & Company.]

Great. Good morning, everyone. John and Jay, congrats on the deal. Just a big-picture question for me. There's a lot of moving pieces with Barstool and Penn Media assets. It's early days, but as you mentioned media right to the Arizona Bowl partnerships with influencers and athletes like Logan Paul, all the content that Dave and team are putting out with Barstool sports betting apps, leading media app now in sports. I'm sure there's going to be more added to the mix, but can you just take some time and just show where your focus and what your vision is for kind of what Barstool and Penn will look like as sports betting and sports media continue to converge?

[Jay Snowden, Chief Executive Officer]

Well, I mean look, what I would tell you is that, it's going to be an absolute evolution. And the things that we announced last week weren't even on the table two months ago. So, it's a great question Bernie. I think the opportunities for us as a company with the great companies and brands of Barstool and theScore really are endless.

And I don't -- look, from my perspective, there is no better top-of-funnel brand in the US from a sports media entertainment perspective than Barstool. Nobody knows how to engage an audience, acquire customers, attract eyeballs the way that Barstool does. They're brilliant at it. And the brilliance is really on this phone with Dave and Erika, and of course Big Cat and the team at Barstool.

And I look at theScore and say, they're also very, very strong on the acquisition side. And where they're even stronger is on the engagement and on the retention side because there really isn't anyone better at sort of delivering personalized content. Again, I've been on theScore app for years myself, and I'm a Yankee fan. And it's so -- everything that they do is so real time, it's customized, it's personalized.

And when you're in their app, you're attracted in there from maybe a headline or a highlight or some stats or scores. And then once you're in there, it's seamless. You also want to bet on the game, you can do it right there and it takes you to theScore bet. So this integration between media and betting, I think, is -- we're going to do it better than anybody else, because we own that entire ecosystem and the entire experience.

So when you combine the power of Barstool from an acquisition standpoint, the strong brand, it's just getting bigger and bigger every day, both as it relates to sports and media and entertainment and then you look at what theScore does best, we think it's -- we're building something that's best-in-class and something that can't be duplicated.

[Bernie McTernan, Needham & Company.]

Got it. And then at the time of the Barstool acquisition, you went over a lot of details on the Barstool demographics of the core users or the stoolies. Any sense in terms of what the overlap is between the core users of theScore and Barstool?

[Jay Snowden, Chief Executive Officer]

Yes. I'm happy, John, to have you talk a little bit more about the demographics of theScore. And I would tell you, from my perspective, we know that there's some overlap, but we also know this is largely incremental, especially when you're talking about their user base in Canada. But go ahead, John.

[John Levy, Founder & Chief Executive Officer, theScore]

Absolutely. And I think, Jay, sort of, hit the nail on the head. We've been building the brands in Canada, but obviously throughout North America for a whole bunch of years and two-thirds of all of our users come from The States, probably the most highly engaged audience of any sports -- digital sports media company. And the key factor that Jay did mention is with respect to the retention and the engagement that we get from the users, they're on our app. We can tell on -- it's very personalized.

We can tell what's going on, on a -- almost, on a minute-by-minute basis. Some days people are banging the app left, right and center and you know why they're doing that, is because predominantly they're betting on sports. And really the experience in Canada is exactly the same.

Our presence in Canada, the leading digital mobile sports company in Canada, we're like second or third throughout North America. And the footprint we have both there on our social platforms is quite frankly enormous.

And it's -- there is -- Jay's right, there is going to be some overlap, but the opportunity here to collaborate with Penn sitting sort of at the core, to collaborate with Barstool is enormous and just in terms of the type of efforts that we're going to do.

It's pretty traditional stuff that you're seeing from the other media companies, like Jay suggested. Logos on billboards and joke about sponsoring hotdog-eating contest and all that sort of stuff. Our whole approach to sports and I believe Barstools' as well, is just this authentic approach to connecting with the end user with the sports fan.

And we do connect. I think we connect in somewhat different ways, obviously, and I think that's what makes it so complementary. We're kind of like two sisters now or brothers in this family and there's going to be all sorts of ways that we can collaborate and dig deeper and extend this relationship.

And then, when you put the power of -- one of the reasons that Penn was so excited and interested in theScore was because, with the technology that we built over the years, it gives them the absolute control to be able to do whatever your mind can think of.

So when we come up with different promotions that the other guys can't think of, marketing campaigns or some of the wild and crazy stuff that Dave and Barstool are going to come up with, you don't have to wait around to be able to implement this stuff.

And the guys at Barstool will tell you, that one of the biggest opportunities is everything has to be immediate. You come up with an idea and you got to present it to the sports fans right off the top and you have to be able to deal with it instantaneously.

One of the -- just one last thing I'll comment upon is why the technology works so good and why it opens up so many opportunities, specifically, in terms of revenue generation is, as probably most of you are aware, 40 to -- almost 50% of all wagering now is in games.

Well, if you don't have the technology that allows you to avoid that spinning wheel of death while people are trying to consume this content and have the indication that they want to make a bet instantly or price a wager instantly, you lose the momentum and you lose the ability to do that.

So I think when you put all this together, I think, Jay mentioned earlier, if you look at Penn and what they've gotten now, it ticks all the boxes. And this is something that we saw in talking to Jay years ago. We deal -- the first deal we did with Jay was our access deal, I guess, over two years ago now, which gave us a footprint of 11 states in the U.S.

And even back then, we could see that there was a real tight shared vision. And there was the same culture. And now with resources and scale to accelerate what we're doing in -- throughout North America and predominantly in Canada, where we tap into that big resource pool it really is a very, very unique offering.

[Bernie McTernan, Needham & Company.]

Thanks John.

[John Levy, Founder & Chief Executive Officer, theScore]

Great. I appreciate it. Yeah. Thank you.

[Jay Snowden, Chief Executive Officer]

Thanks, Bernie.

[Bernie McTernan, Needham & Company.]

Yeah.

[Operator]

Thank you. Our next question comes from the line of Ryan Sigdahl with Craig-Hallum Group. Please proceed with your question.

[Ryan Sigdahl, Craig-Hallum Group]

Good morning. And congrats on the results and the transaction announced.

[Jay Snowden, Chief Executive Officer]

Thanks Ryan.

[Ryan Sigdahl, Craig-Hallum Group]

Curious, you've talked a lot about kind of the integration of tech. How do you feel about the development of the in-house managed risk and trading service platform specifically. And then secondly, also on content, so thinking -- does this close all the loops from a tech standpoint? Or is there more work to be done?

[Jay Snowden, Chief Executive Officer]

No. This closes it out. It's really exciting. And I would encourage people that are in New Jersey or any of the states where theScore is live you can really go in and get a feel for what their player account management platform is all about. And they're actually going to be converting over.

And John, maybe you can elaborate in terms of timing when additional conversions are going to be happening over the coming months, particularly as it relates to managed trading services.

I would -- before I hand it to John, I would just say, again, we've known the Levies for years. And one of the things that, I've always been really impressed by is that, this is a company that was built on technology. They've always been digital-first, they've always been technology-first.

Their home office and hub is in Toronto, which is the tech capital of Canada. And it's such a huge opportunity for us, as we think about the future. It's so hard to compete for tech talent these days in the U.S., not that it isn't in Canada.

But the nice thing about Toronto and the nice thing about theScore is that theScore is the premier company, the premier brand, especially as it relates to all things sports media and soon-to-come sports betting.

And so our ability to continue to augment our current team in Philadelphia, with the team in Toronto and build out in both cities. There's a huge opportunity there. And John, maybe I'll turn it over to you to talk specifically about the timing around managed trading services and some of the new features that you're going to be rolling out from a TAM perspective.

[John Levy, Founder & Chief Executive Officer, theScore]

For sure, I mean, it's interesting. It's -- I often think about -- people can't believe it's this app. And everybody uses it. And it's simple and it just works. And we couldn't become the most popular sports app in Canada and the second or third in the U.S. without all the effort and work that's gone into it. It looks pretty simple. He uses the comparison of this duck floating across the water and his legs are seriously pedaling underneath. And that's kind of what's driven this.

So when the betting opportunity came up and PASPA fell in the U.S. and we made the big decision to become the only digital sports media company to actually become the operator and not just lease out our huge engaged user base, but actually take the bull by the horns, that was a pretty ballsy and pretty gutsy decision for us, because from a revenue standpoint, it wasn't easy just to suck up all the dollars that everybody would have been throwing at us to get access to our user base.

But we said that just doesn't fit. And what really fits is, when you focus on one thing first which is the end user and the consumer, and how to make it easy for them, we decided we have to build our own technology. And that's what we did. And it was a process. And we did it over the course of the last 12 months to 24 months, because you can't do this thing overnight but the approach is absolutely right.

And during that period, we assumed more and more responsibility. And as Jay just mentioned, we just announced in our last quarter, we've taken full -- basically full charge of the whole stack.

And the last element is the risk and trading team which -- and providing risk and trading services which were already mirroring inside of our company, because risk and trading is still being handled by the company that we did a deal with originally to enter into the gaming space which is -- that worked out of the U.S.

So we're saying within the next nine months, 12 months, I mean it's basically sometime and hopefully sooner in that time line, we will have all of that in-house. But in the meantime, it's about 90% of it is now inside of our own our capabilities.

And that allows us for example full player account management system. We just launched our new promotion engine. And I know someone like Mr. Portnoy is going to go crazy with stuff like that, because you're going to come up with different ideas and different types of promotions. And if you typically have to wait on a third-party, who is handling all this stuff for you – you get to the bottom of the list, or it takes too long or the event has come and gone.

So in our case, it gives us the maximum flexibility to be very creative, but then to be able to execute almost instantaneously. And I know, this is one of the reasons Jay in addition to loving everything that we're doing, they love the brand, they love the users that we have, what we've built. But I think a lot of it is just thinking differently than what the traditional sports, media and sports gaming companies how they think. And this really is a transformational deal.

If it wasn't, it wouldn't be something that me, or my family would have been interested in. And we're banking on having this amazing relationship with Penn, and utilizing the resources of scale to really blow it up here in Canada, and also to blow it up all across North America. And I don't think anybody – and I don't care, who we're talking about has the same capabilities of what we now have with this triumph, or with this tri-actor.

[Jay Snowden, Chief Executive Officer]

The one thing, I would add to John's comments, is that, technology is a really interesting thing because what is the latest and greatest today is extremely outdated two or three years from now. And so as you look at the different tech stack options that are in the market today, there are a lot of really good ones, but we're going to be on one that was built for the North American market, and is going to be the most state-of-the-art, the freshest, the newest, the greatest, the most features out there. And we think that's going to allow us to leapfrog the competition as we go live in Canada very soon, and then bring it back to the US, which we anticipate happening in 2023.

So I guess the very last thing I would say about the tech stack is we have been partnered up with two really great companies in White Hat Gaming and Kambi, and this is not a knock against White Hat Gaming or Kambi. They've been great partners. They've been there for us very responsive. They're great B2B companies. And – but at the end of the day we ultimately given how important this is for the company's future and how important it is for us strategically, as we think about where and how we create value for our shareholders and stakeholders over the long term, we just have to be in control of our tech stack.

And you've heard me say that on calls before, and we went out looking for the right tech stack. And what we ended up with is not only best-in-class tech stack, but an amazing brand, an amazing company, and gateway to what is a huge opportunity in Canada, with one of the strongest sports brands in all of Canada. So we think we got the best of all worlds here.

[Dave Portnoy, Founder, Barstool Sports]

And Jay, this is Dave. Just to give people kind of how it could potentially work. We – Barstool, we've never had the opportunity as John was saying to create things that would be specific for us, because we're working with companies that serve multiple end users. But we talked about the Arizona Bowl, which we'll be controlling soup to nuts for example, which we have the broadcast, we have everything you can name is up to us. So a scenario, where we're able to create bets and things specific for them, put the content and highlight it on theScore, which serves all these people interested in gambling as well as us, and be able to have things that nobody else can offer and coverage of the game that nobody else can offer, and now the ability to create bets that we know we're going to focus on in the game. And this – the Arizona Bowl is just really the beginning. It's one of the things people look a lot of times like why is Barstool doing Arizona Bowl.

Well, since then we've been approached by other sports leagues some of the major four interested in giving us rights. But we are going to control the experience of the bets and be able to offer things that simply nobody else will even know is coming, and they won't be able to react quickly. So it really gives us, again, the ecosystem from the beginning of the game, covering the game, in-betting during the game, and then directing people a bet towards the game that will be totally unique.

[Jay Snowden, Chief Executive Officer]

Well said, I agree with that.

[Ryan Sigdahl, Craig-Hallum Group]

Jay, John, Dave, appreciate all the detail. I'm sure other have ton of questions here. I’ll turn it over. But thanks guys, good luck.

[Jay Snowden, Chief Executive Officer]

Thanks, Ryan.

[Operator]

Thank you. Our next question comes from the line of Shaun Kelley with Bank of America. Please proceed with your question.

[Shaun Kelley, Bank of America]

Hey, good morning, everyone. Congrats to John and Jay, and the Levy family. I just wanted to start Jay maybe to clarify a point I think you snuck in there. As we get into technology and there's been a lot of questions about the importance of owning the vertical tech stack here can you just talk about the timing of integrations here? I think you snuck in the 2023 number but can you clarify that a little bit when you might over off of existing platforms or technologies? And do you think that is disruptive at all and/or how important is it to get that done quickly or in the right way?

[Jay Snowden, Chief Executive Officer]

Sure. Happy to Shaun. And again we're still finalizing the plan. But here's the way we're thinking about it currently, which I think is about as bulletproof as it gets which is that theScore Bet is going to be going live in Ontario whenever Ontario is ready to go call it December, January already on their own PAM. John had said on his last earnings call with Benjie, that they plan to be live on their own managed trading services platform sometime spring summer of 2022 so call it in less than a year.

And it gives us an amazing opportunity to make sure all of the technology is working as planned in a really, really important market and what we believe will be under high stress, high volume because of how strong theScore brand is in Canada. And at the time that we believe it's ready to bring back to the US and convert our tech stack over that's when we're going to do it.

We think that will probably happen in 2023. Is it the beginning of 2023 or middle 2023? Not sure yet but I would say we're highly confident it will be before football season of 2023. But we want to make sure that we get this all right first and we get it right in a market that is really important with high volume and high market share and Canada, Ontario is the perfect opportunity for us to do that.

So that's the way we're thinking about it today, Shaun. And we'll obviously continue to update everybody on the call as we have more information. I think we all have a pretty good idea given the DraftKings SBTech conversion I think took around 18 months. And so it feels like that's probably about the right time frame for us as well 18 to 24 months before we bring it back to the US.

But with all of that said as Dave just mentioned and John mentioned earlier, there's so much we can do that's complementary between now and then mainly, as it relates to promotions and exclusive betting options and things of that nature. We don't have to wait to all be on the same tech stack to start executing on that now.

[Shaun Kelley, Bank of America]

Great. And then as my follow-up between here and 2023 are two relatively important and likely competitive sports seasons. So, just wanted to get your thoughts heading into the fall around just where we sit as it relates to both your technology offering and the national scale side of, what you wanted to do on the marketing front. I know you have talked over the last six months of getting more aggressive on regional and more pan-regional promotions. But obviously, there's some very large names coming with very, very big wallets into the fall, that are also scaling really rapidly. So help us sort of outline both the competitive environment and how your competitive thinking is evolving.

[Jay Snowden, Chief Executive Officer]

Yes, happy to. So we -- and this is one of the things that I'm probably most proud of is that we went from not having a sports betting app at all 2.5 years ago to have launched our own in September of last year in Pennsylvania and have really scaled that across the four states that we're currently live in. And we've done a great job of that.

Our iOS app rating is a 4.7 on a scale of zero to 5, right up there with the top of the marketplace. So we're competing with DK FanDuel and BetMGM as it relates to the overall experience. It's not like our product today has a poor experience. We've just been playing catch-up. So we launched and you look at what we're going to have from a product perspective at the start of football season this year versus what we had last year both as it relates to sports betting and online casino and it's not even comparable.

So we think we're going to continue to be competitive. And again, I complemented Kambi and White Hat Gaming. They've been working their tails off with us over the course of the last 12 months to make sure that we had new features and a great UI/UX heading into football season this year. We're going to have same-game parlay, which is a huge, huge betting opportunity as it relates to NFL.

We're going to have shareable bet slip which is something that Dave and Dan have been asking for since the day we met, years ago and we finally can offer that, which makes it really easy for them to post what their bets are on social media. It's one click and you're into the Barstool Sportsbook with a populated bet slip. So, there's a lot of things we're doing this year that we couldn't do last year.

And then as it relates to online casino, we launched as quickly as we could and we knew that we had to be live in Michigan at the same time everybody else was. So, we rushed to do that. But admittedly, we don't have -- we didn't have the full complement of content at the time. And as you look at what we're going to be able to offer in the fall this year as it relates to online casino, it's going to be a much larger wider library of content.

We're also going to have Blackjack -- sorry excuse me Barstool-themed games both on the Blackjack side as well as slot content that we've been developing at our HitPoint Studio. That's going to be happening this fall as well. And then we're actually going to have custom live dealer, Barstool-theme live dealer in New Jersey when we launch iCasino in New Jersey here in the next several weeks. So, we've got a lot of really exciting things from a product perspective that are in the hopper which is why to the second part of your question Shaun, we feel much more comfortable being more aggressive as it relates to not just getting the word out as it relates to Barstool but also spending some money to do things that we wouldn't have done last year because we didn't have the scale.

You wouldn't sponsor a fight that has national appeal or you wouldn't do what our partners at Barstool are doing for the Arizona Bowl. You wouldn't have done that last year. There's things that we can do this year and I don't want to share more because we have more that we're working on but stay tuned. That will be I think broader and sort of really focused on widening the funnel even beyond what we did in 2020.

[Shaun Kelley, Bank of America]

Thank you very much. Congratulations.

[Jay Snowden, Chief Executive Officer]

Thanks Shaun.

[Operator]

Thank you. Our next question comes from the line of Ben Chaiken with Credit Suisse.

[Ben Chaiken, Credit Suisse]

Hey, how is it going? I think we've kind of touched on this, but I'll try differently. I guess Score has a very high-quality news analysis, social media, strong OSB app. I mean Dave and Jay you both talked about using it for years, I'm in a similar boat. Understanding it's still early there seems to be a dichotomy in my mind between the quality of theScore product which is very strong and then kind of the market share generated thus far in the US.

How do you think about leveraging the product the existing product in the US to drive greater OSB iGaming share? Like do you combine that -- do you combine theScore product with Barstool to amplify existing Penn Barstool product in the US? Or is it about putting money and promotion behind Score in the US to get the name out there? The tech and vertical integration totally makes sense coming at this more from a B2C product standpoint if that makes sense.

[Jay Snowden, Chief Executive Officer]

Yes, it makes total sense Ben. And John I don't want to speak for you on this one but I know that we are absolutely in the same boat as it relates to how we launched in the US which is that both Penn -- with Barstool Sportsbook as well as theScore, we have spent virtually nothing on paid marketing. And the reason why is that one we wanted to make sure from our perspective on the Penn side that we allowed Barstool to do their thing and really prove out the model which we continue to do and I think it's great a result.

And also because we needed to have the right product and capabilities. And I know that John and the Levy family were very focused on making sure the product is right before you start spending to drive market share. And so we're not concerned with where market share has been it's more -- our focus is where it's going to be.

And I just know that the power of Barstool and the cross-promoting opportunities that they present and Dave and Dan it's of course nice that they love theScore technology and application and being able to put theScore on even a bigger stage in the US than it's been because of the fact that it's now part of the same family I think is a huge opportunity.

And I think it will play out Ben in terms of what's the strategy in the US is it two brands from a sports betting standpoint or is it one. We have plenty of time to figure that out but I would expect to see improved market share results from both theScore Bet in the US as well as Barstool's Sportsbook as we head into football season this year and the product is better and we have reasons to be marketing more aggressively than we did in 2020. John anything you want to add to that?

[John Levy, Founder & Chief Executive Officer, theScore]

Yes. Hi Ben, how are you? First of all, yes, I think Jay's got it right. I mean our approach and Jay's approach have been different than most in the context of sort of buying your way to huge market shares and then just hoping that it's sustainable.

And we've said right from the get-go that you lead with the product and you build the product. And for example, in the US, we've talked about mid-single-digit to low double-digit penetrations that we're going to build to. And we are on course building towards that over the history that we've had and where we are today.

In Canada, obviously it's going to be a bit of a different story or probably a lot of a different story because of how extensive the brand resonates. We've been around forever. Kids who are watching our TV network in Canada before we sold it to Rogers are now 20- and 30-year olds and betting on sports right? So the infiltration in terms of the audience that we have on the app is -- you add up the other media companies in Canada and put them together they don't come close to us.

And even with the big U.S. brands coming into Canada because I'm sure they're going to come because Ontario is the equivalent in case you people don't -- aren't aware of it of the fifth largest state in the US. So while all of us are jonesing to get into Texas, Florida, New York etcetera and we are looking at strategies to do that we're sitting right here in our home turf with the equivalent of -- and when it's operating at the end of -- towards the end of 2021 we'll be the largest jurisdiction in North America for sports betting. So very, very exciting for us.

So one of the reasons that I think Penn and Score hit it off so well is because of our approach to going after the market and doing it sensibly. And some of the stuff that Barstool's talking about now in terms of getting into a different way to present sports events. I think the key and what you should take away from that is, you've sort of tossed away all the sort of traditional legacy ways that people are consuming sports content. We've built a whole company on the basis of just following the consumer and how he or she consumes sports content.

The same thing follows and this is why all the teams and leagues are desperately looking at new alignments and it's all about engagement because people just aren't consuming sports the same way they historically have. So start from a digital perspective which I think is what Dave is talking about in terms of doing this bowl game and work it up from there. Start from the consumer figure out how he's watching or participating or going to these games what excites him and then provide the product to be able to do that.

And I think one of the things that Jay referenced earlier is if you look out we know what we're doing today. We're building this amazing product. We know what sports betting looks like. We're doing it differently than anybody else with this integration into the media space. And if you're picking on a box score or you want to make a bet it's one click away. I mean you have this amazing ability to make wagers in game very quickly and efficiently.

But that's -- we're just the tip of the iceberg. Like we're going to look back a year or two or three from now and say we felt we were good then. We didn't -- we were just doing nothing then as compared to what it's going to look like. So, when you start to view it differently, you view it from a digital mobile perspective rather than just the legacy traditional way of looking at sports and how people are consuming it that's where the big parlay and that's where the big opportunity is. And I think that's why we're also excited about what's come together here in -- with Penn.

[Dave Portnoy, Founder, Barstool Sports]

Sorry Jay just one thing to add to that original question in terms of theScore in the United States. I think something and this is Dave again from Barstool, that we've learned and Dan and I have learned and all the people at Barstool is our influence is really, really big. And through the years we may be a little naïve, but we would do deals with companies and it could be any vertical. It could be shelters with like high noon. I'd argue that one of you could say sort of a competitor but Action Network was built on our back like we had the churn in connection nobody knew what it was and we were promoting that actively that app.

All the user base was built on Barstool promotion. You could look at Robin Hood. If you go look where is the explosive user base from that. A lot of people point back at what we are doing with DDTG and the everyday trader and getting people involved even our podcasts like Call her Daddy things -- we have the ability to sort of king-make we have gotten better as the years where we stopped mentioning companies purposely because like why are we building other.

We -- I think a huge opportunity and the synergistic nature of this is we know how good theScore is. I've used it forever. Dan has used it forever. We know it's best-in-breed. We are going to turn that faucet on. And if we think theScore is big now like relatively speaking, I think we're going to turn that 10, 20x because all of a sudden every time we talk sports, games, gambling, it's theScore it's theScore it's theScore. We haven't had that.

So when we talk about how is it going to grow in the United States to me that's one of the biggest parts of this. It's people – and John just kind of talked about this. To me this deal is never about like okay what's the market share anything like that. It's the perfect synergistic company we need to help each other and grow each other. So that – in the United States I expect theScore, over the next year to – I mean I don't really want to put a number on it but we're going to make that a household everybody will know what it is everybody will use it for scores news all of that stuff. We purposely don't mention companies now because we know the effect we have when we basically bless it. So we plan on doing that obviously our full boat.

[John Levy, Founder & Chief Executive Officer, theScore]

The only thing I'd add to that it's perfectly – it's perfect evidence of that. When you look at the reach that we have in Canada, where people are perfectly familiar with theScore. As I said before, they grew up everybody here is on theScore, everybody. We compete – we've never shied away from competing and these guys know that.

We launched our TV network in the mid-90s, up against your version of ESPN, up here called TSN and Roger Sports Net. And we kicked their butt because we did things differently. And then when we launched – moved into the digital space, people just came to expect that same level of authenticity, respect for the customer, just give them what they want. And we joke about it in the states, we're the most-used least-known brand in the sports business. And we're kind of like the New York Rangers in New York, right?

Everybody who loves the Rangers goes to the game, right? And we joke about that with respect to theScore, right? Because people who are on our app in the US and who are betting through Score Bet into the Score Media app, love that as well. So I think you're going to see an elevation.

I've always said, when we get into betting and this is even before the Penn deal and the sort of arrangement that we – and this collaboration that we're going to have all the time with Barstool is that sort of the rising tide will raise boats. Betting will influence our ability to extend the brand in the US and as we grow the brand in the US, betting will take off.

And now we're supercharging this with everything that Penn brings to the table and Barstool. And in Canada, we're already there. I mean in Canada we just can't wait to unleash the power of our integrated betting operation, which will be as Jay mentioned, under the same brand because that's what makes sense. And in the US, we're going to figure it out. And then we have the luxury of being able to figure it out because we're up and operating in the four states currently with Score Bet. And over the course of the next 12 months we're – I'm fully confident we're going to be able to decide what's the best path and really decide that not from theScore or a Barstool Penn but focusing on the consumer and saying how do we do that best?

[Erika Nardini, Chief Executive Officer, Barstool Sports]

This is Erika. The only thing I would add is if you look at – we have the number one podcast in Canada in Spittin' Chiclets. That's a brand we've built with two former NHLers. We've built it of our own momentum and their humor and our perspective on hockey.

We are so excited to partner with theScore to really think about we know how to grow brands and create brands. They know how to create media, serve technology, build community, those two things put together under any number of brands in these two markets is incredibly powerful and no one else is doing that.

[Jay Snowden, Chief Executive Officer]

Yes. Listen you can understand why it's easy to get excited about this. This sounds like the conversations we were having in New York, a couple of weeks ago as a group you leave the room and just full of ideas and energy and it's a shared vision, which I think is super powerful.

And look, there is no better amplifier than Barstool here in the US and I would argue the same thing about theScore in Canada. So the amplification of each other's brands and being able to cross-promote and cross-market between the two is super powerful, especially when both sides are believers in each other's brands.

[John Levy, Founder & Chief Executive Officer, theScore]

And the last thing, I know, we're talking all over each other but they are distinct voices that work well together. I think that's really one of the key elements. And that's why we're going to be able to continue to grow up here in Canada and grow exponentially as well in the States.

And I think that's the luxury that we have in the context of what these assets are and how significant it's going to be up here. We're just going to rock up here. And that creates all sorts of opportunities in the context of building our team and building our presence at home.

[Joe Jaffoni, Investor Relations]

Let's, Rita go with one more question please.

[Operator]

Thank you. Our last question will come from the line of Chad Beynon with Macquarie. Please proceed with your question.

[Chad Beynon, Macquarie]

Hi. Good morning. Jay, John congrats on a great strategic deal and a cultural fit. Thanks for squeezing me in. One question just given your improved customer reach now and improved margin profile does this position you to make a more compelling pitch in states or provinces like what we're seeing in New York that maybe before didn't make as much sense, but given this different business model that you have can you get into these markets or make a pitch versus some of the bigger companies that are spending a lot more money? Thanks.

[Jay Snowden, Chief Executive Officer]

Yes. I think it's a good question Chad. And what I would say is, obviously, what we represented as a company yesterday versus what we represent today it's just gotten stronger, and some of these states it is a bit of an open competition. New York is one of those. They're going to choose a couple of platforms and a number of operators and we think that what we bring to the table and how we're thinking about who we might partner with on a bid in New York, it's going to be very differentiated.

And we have opportunities to do things that no one else can do, because the power of the media integration both with Barstool Sportsbook and in the not-too-distant future theScore as well. So yes is the answer. I don't want to talk a whole lot more about our approach in New York. I would just say that we think we have a great opportunity. And we also -- because of the structural advantages -- look nobody wants the tax rate as high as what's being proposed in New York, but if anybody can make money in that sort of environment it's us.

[Chad Beynon, Macquarie]

Great. And maybe one follow-up. Jay how are you thinking about the ever-changing lifetime value of customers particularly now that you have a compelling iGaming product in studio with HitPoint? I know that's changed over the past couple of months. Also with Score's users should we assume that maybe the lifetime value of their customers given they're slightly older slightly wealthier and a little bit more engaged could be higher than what we have been assuming for a typical customer? Thank you.

[Jay Snowden, Chief Executive Officer]

Thank you for asking that Chad. Here's the way we think about LTV. And I think that there's a lot of different approaches to calculating LTV. We have -- let's just talk about with regard to Barstool. That brand is the most relevant sports media and entertainment brand for anyone aged late teens, early 20s through mid-30s. And when you think about the average age of who's on the Barstool Sportsbook today, the average age for us is late 20s. No one can touch that. I don't need to know what everyone else's database looks like. I just know they can't touch that. And we also know that the loyalty to Barstool is very, very high, and I think that LTV is too easily calculated today.

If you win a customer over by spending on linear TV, and you get a customer on a rich promotion, and you're assuming you're going to keep that customer forever on an LTV basis, I think that's flawed, and I think that our ability to calculate LTV is much stronger, because of the retention value and the fact that the average age is so much younger. And I think that theScore not to overuse the term amplify, but it really does amplify that because of how strong they are on engagement and retention that you heard all of us talk about so far the live media, live betting experiences, the customized, personalized offerings and engagement.

So LTV, we just -- I think as wide as the funnel has been now we're going to be able to do a much better job. I think Erika articulates this very well of keeping people in the ecosystem once they're there. And theScore takes all of that to the next level and I think LTV for us is going to be a real number and we'll see how it plays out over time for everyone else.

[Chad Beynon, Macquarie]

Thank you very much.

[Jay Snowden, Chief Executive Officer]

Thanks Chad.

[Jay Snowden, Chief Executive Officer]

And Rita I think that's it for the call. I really appreciate everybody joining us today. Excited to share with you the news. Erika, Dave, John thank you for joining and just great to hear everybody's perspective. We're obviously really excited about this, and we're just getting started. So, we look forward to speaking with you on the next earnings call.

[Operator]

Thank you. That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.