Good afternoon, and welcome to the Boyd Gaming Second Quarter 2023 Conference Call. My name is David Strow, Vice President of Corporate Communications for Boyd Gaming. I will be the moderator for today's call, which is being recorded on Thursday, July 27, 2023. [Operator Instructions]. Our speakers for today's call are Keith Smith, President and Chief Executive Officer; and Josh Hirsberg, Executive Vice President and Chief Financial Officer. Our comments today will include statements that are forward-looking statements within the Private Securities Litigation Reform Act. All forward-looking statements in our comments are as of today's date, and we undertake no obligation to update or revise the forward-looking statements. Actual results may differ materially from those projected in any forward-looking statement. There are certain risks and uncertainties, including those disclosed in our filings with the SEC that may impact our results. During our call today, we will make reference to non-GAAP financial measures. For a complete reconciliation of historical non-GAAP to GAAP financial measures, please refer to our earnings press release and our Form 8-K furnished to the SEC today and both of which are available at investors.boydgaming.com. We do not provide a reconciliation of our forward-looking non-GAAP financial measures due to our inability to project special charges and certain expenses. Today's call is being webcast at boydgaming.com and will be available for replay in the Investor Relations section of our website shortly after the completion of this call. So with that, I would now like to turn the call over to Keith Smith. Keith?

Thanks, David. Good afternoon, everyone. The second quarter was another solid performance by our company as the benefits of our proven operating model, our strong management teams and our successful growth initiatives all contributed to company-wide revenue and EBITDAR in line with last year's strong second quarter results. Operationally, we maintained our focus on driving play from our core customers. During the quarter, core customer trends improved sequentially over the first quarter and were consistent with last year's record levels as a result of stable frequency and spend per visit. However, the consistency in core customer trends was offset by continued softness in retail play that began in the second half of last year. During the quarter, our management teams continue to do an excellent job controlling expenses in a challenging environment. Over the last 1.5 years, we have held property level expenses essentially flat during this highly inflationary environment. As a result, we achieved property-level operating margins of 42% in the second quarter, consistent with recent quarters and remaining well above our pre-pandemic levels. Finally, we realized substantial benefits from our ongoing growth initiatives, including online gaming, sports betting and Sky River Casino. Combined, our online and managed segments generated $33 million in EBITDAR in the quarter putting these businesses on pace to achieve $135 million in total EBITDAR for the full year. Let's review each of the segments in more detail. In our Las Vegas Locals segment, we faced a difficult comparison to last year. This comparison was most pronounced in April, which accounted for roughly 90% of the quarterly year-over-year decline in Locals revenue and EBITDAR. As you may recall, early last spring, we saw a temporary surge in business after mask mandates and other cohort restrictions were lifted in Nevada. By comparison, both May and June…

Thanks, Keith. I'm going to present a few financial items related to the quarter and update you on our capital investments and shareholder return programs. Total company-wide revenues of $917 million rose 2.5% over prior year, while EBITDAR of $351 million nearly matched last year's strong second quarter performance. As Keith described, we faced difficult year-over-year comparisons during the quarter with April accounting for nearly 70% of the year-over-year property level EBITDAR declines. May and June's year-over-year variance improved sequentially with June performing essentially even with prior year. Property level margins were 42%, while company-wide margins exceeded 38% during the quarter, both consistent with the last several quarters. As an aside, our Online segment included a tax pass-through amount of $63 million compared to $48 million last year in the second quarter. These amounts are recorded as both revenues and expenses in this segment. During the second quarter, capital expenditures were $75 million, including spend for both Fremont and Treasure Chest. Year-to-date, capital expenditures have been $171 million. We continue to project total capital expenditures of $350 million for the year, including $250 million in maintenance capital and $100 million related to Treasure Chest in Fremont. We repurchased $100 million in stock during the quarter, representing 1.5 million shares at an average price of $67.02 per share. This brought our actual share count at the end of the quarter to approximately 100 million shares. In less than 2 years, since we resumed our capital return program, we have repurchased 14 million shares or about 12% of the shares outstanding at the initiation of our repurchase activity. We had approximately $533 million remaining under our current repurchase authorization as of June 30. Additionally, we paid a regular quarterly dividend of $0.16 per share on July 15. And pending board approval, our next dividend is expected on October 15. Our balance sheet remains in excellent shape with total leverage at the end of the quarter, approximately 2.3x and lease-adjusted leverage 2.7x. We have no near-term debt maturities and ample borrowing capacity under our credit agreement. In conclusion, this quarter reflected the benefits of our diversified portfolio, our growth initiatives, our focus on our core customer segments and officially managing our business. We have a very strong balance sheet, generates substantial free cash flow, providing us the ability to continue investing in growth while returning significant amount of capital to our shareholders. David, that concludes our remarks, and we are now ready to take questions.

Thank you, Josh. We will now begin our question-and-answer session. [Operator Instructions]. Our first question comes from Joe Greff of JPMorgan.

I was hoping we can dig in a little bit in the Locals market. And if you can maybe talk about sort of the customer segment, not necessarily by kind of core local or out-of-town guests but in terms of average theoretical or net worth. Was there a big difference between the upper tiers of your database versus those in the lower tiers of your database in terms of visitation and spend? And then how does that -- how do those sort of buckets of trends -- how did they evolve over the quarter?

So Joe, this is Keith. In terms of kind of the higher end of the database or what we refer to as our core customers versus the lower end, the upper end of the database, our core customers performed well, as I said in my prepared remarks. What we saw was some pullback in visits. So the number of customers was stable, the spend per customer was stable, just a little lower in visitation. The lower end of the database, which has been kind of shrinking for years, just continued to shrink. It didn't accelerate or decelerate it. It has been on a trajectory to just been soft. So I don't think there's anything noteworthy there. And once again, we simply saw some pullback in visitation. Now I indicated in my prepared remarks also that July is looking better. The trends we're seeing in the first 3 weeks of July in the locals market, visitation is back up. And so those -- the trends are not that 3 weeks makes the entire quarter, but the trends in the first 3 weeks of July have certainly changed compared to the second quarter.

Yes. The only thing I would add just broad-based and high level is it was really about softness in April. And as we move through the quarter, things just sequentially improved. And then as Keith mentioned, have kind of turned positive in the first 3 weeks of July, and we'll see where it goes from here.

Thank you, Joe. Our next question comes from Carlo Santarelli of Deutsche Bank.

Josh, so just following up on Joe's question, when you guys kind of looked at that April period and there was some softness. Did you notice any change or any change in the behavior promotionally from your competitors in the market? Or that little soft pass kind of went without much incremental promotions or offers going out?

I would say here in the locals market, Carlo, that the promotional environment really hasn't changed for a while. Everybody has kind of laid out their position from a marketing standpoint and everybody is remaining relatively stable. A couple of aggressive competitors. But for the most part, everybody is continuing to do what they do. April, and Josh alluded to this a few minutes ago, really was about a comparison issue to last year. So sometimes or often times as we go back and look at 2019 as a baseline. In April of last year, April of 2022, it was up nearly 100% in the locals market compared to 2019. And so while it was soft this April of '23, it was really more of a comparison issue. And as Josh said, May and June actually compared to 2022 were relatively flat. So I do think April was not about more softness than May or June, it was really about a comparison issue.

Understood. And then just in terms of, as you look across the operating portfolio, obviously, if you kind of look and see what OpEx trends look like, they all look fairly stable in terms of non-gaming tax-related operating expenses. Is it fair to say that kind of any iterations of expenses from here would relate more to seasonality and certain markets and their respective seasonalities? Or is there -- are there still pressures or incremental hiring or things of that nature that haven't yet come through?

No, I think you're right. If we think about our expense levels, they've been relatively consistent for a number of quarters now. And we've implemented wage increases. We had put our team members on a pathway or hourly team members on a pathway to $15 an hour. We've completed that. And so utility expenses are high in many markets, but that's in the current number. So I think any future variation will be based on seasonality and/or demand. As revenue goes up, we can see some incremental labor. But there should not be any significant changes in the overall kind of expense levels going forward.

Thank you, Carlo. Our next question comes from Steve Wieczynski of Stifel.

So Josh or Keith, I want to go through the Southern markets, which you've now called out, I think it's been a couple of quarters at this point in terms of seeing some softness there. It sounds like it's a little bit more on the lower tier of your database. And I guess the question is, has that market or those markets, is that deteriorating? Or is that still just it's soft, but it's stable. And hopefully, that makes sense.

Yes, Steve, I'll take a shot at it and then Keith wants to add something. Basically, I think we -- in Louisiana and Mississippi, started to see real softness in the fourth quarter of last year. I think the right way to think about it is as we've kind of come into this year, things have just continued to kind of -- they've started to stabilize along the bottom and started to show signs of improvement both in terms of customer trends, revenue trends and EBITDA trends. And so like the variances year-over-year are narrowing in terms of financial performance. The trends with respect to customer behavior, whether it be number of customers, frequency, spend are all starting to tick up. And I think it's a little early to say that it's going to keep going in that direction, but it at least is kind of bouncing off of a stable bottom and seems to be improving. And I would say that's generally how we are starting to gain some confidence that, that part of the business has stabilized along with the rest of kind of even the markets outside of Mississippi and Louisiana.

Yes. Maybe just to reiterate what Josh said, fourth quarter of 2022 is kind of a bottom sequential improvements. And so I wouldn't view it as kind of deteriorating, it's actually able to stabilize and improving since Q4 of last year.

Okay. And then second question for you guys is -- and I don't know if we want to take this. But I mean you guys still have and continue to have one of the better balance sheets out there in the -- across the industry especially when you compare yourself to some of your peers. And you are -- you remain in a very enviable position with that balance sheet. So I guess the question is, can you maybe just update us today in terms of what the appetite is for your company in terms of any large acquisitions at this point? Or where you potentially would look at in terms of using that balance sheet from an acquisition standpoint?

Yes. Look, I think the only thing we could probably comment on is those of you who have followed us for a while as the company has grown over the years quite dramatically through M&A. And what I like to call smart M&A. We've done a great job of picking the right assets and then being able to grow EBITDA from those assets, which has gotten us to where we're at today. We tend to be very, very disciplined. And if there's something interesting in the future, we could take a look at it. But we're not going out of our way to kind of to do anything, but we have grown. It is our history to grow through acquisitions, but we will be -- continue to be very disciplined.

Yes. I think the only concept I'd add to what Keith is saying is we like having a only levered balance sheet because it enables us to consider growth opportunities if they come along. And if they don't come along, that's fine, too, just because we can do acquisitions, doesn't mean that we will. It just continues to be one of being disciplined around that. And I think what we want to really focus on is continuing to be able to return capital to shareholders and be able to pursue growth initiatives at the same time should they come along to be able to do that whether the environment is good or bad. And that's why we have chosen to kind of be at this level from a leverage perspective. It's kind of what we view as an all-weather balance sheet.

Thank you, Steve. Our next question comes from Dan Politzer of Wells Fargo.

I want to follow up on the digital guide. The $55 million to $60 million, just so we can kind of understand where that's coming from. Is that simply just taking year-to-date and then adding the back half of last year because this is obviously tied to Sandy. And so to the extent that we're thinking about possible upside there, is that the scenario? And along with that, if you can just comment on any kind of early take since you've unplugged on the iGame side and as long to start us online casino?

Yes. I'll take the Online and then Keith can take up Boyd Interactive. So the kind of -- we were originally at $50 million. I think consensus was a little ahead of us. So kind of the outperformance in Q2, really, from a year-to-date perspective, catches us up with consensus, if you will. And then kind of we think that -- and then we went in and up to kind of middle of the year kind of Q3 performance to kind of come up with the guidance of 55 to 60. So if we outperform in Q3, then that will probably put us towards the higher end of the range. But what we have basically done is incorporate year-to-date, improve what we expect to do in Q3 and kind of mirror what we expect -- what we did last year in Q4 just given Q4 had kind of some one-off payments in there as well as the startup of markets that we think will have additional competition as we move through this year. So we think it's kind of a middle of road expectation for the Online at this point.

Got it. And just to -- go ahead.

As I say, with respect to the second half of your question, the launch of starts, the online casino business. Look, we did -- we relaunched in Pennsylvania and New Jersey in early May. We spent the first 60 days really just fine-tuning the product and haven't really launched any marketing. July was the month where we actually started to step out a little bit and do some marketing. What I can say is that we're pleased with the launch. We are pleased with kind of the organic growth that we're seeing just from having the product out there without doing a lot of marketing. We're pleased with the reception by our land-based brick-and-mortar customers and their participation with it. But remember, this is a small business for us. We'll grow. This is about kind of the long term and being set for the long term and not necessarily about the short term. So we don't expect to move the needle materially in the short term. But I think we would consider it a successful launch and are pleased with the early results.

Got it. And then just for my follow-up, moving to Downtown. If there's any way to just quantify the disruption there so we can better kind of frame the third quarter. And then as you think about the fourth quarter, I would think that you may see an uptick just in terms of obviously that coming online and maybe even in Formula One coming to town. Is that a fair assessment directionally?

Yes. I think that's right, Dan. I think that the Downtown impact from an EBITDA perspective, we kind of back of the envelope estimate to be kind of $2 million to $3 million in EBITDA. And I would expect that you'll see pressures in Q3 related to further disruption, and then we'll start to try to make some of that back, both in Q4 and Q1 as the business has come back online as we make our way through Q4 because it's not all going to come back on first day of Q4. But -- so that's kind of how we expect the rest of the year for Downtown to play out.

Thank you, Dan. Our next question comes from Jordan Bender with JMP Securities.

Looking into the Locals market, maybe just an update on the convention and group business, what you're seeing in the next couple of months and maybe pricing over last year as well.

Probably the only comment we have on overall convention business, and we have some limited square footage at the Orleans and a few other properties. So it isn't a huge piece of our business, but we see it continue to grow back. Convention business was up significantly year-over-year, still running slightly behind 2019, but is up significantly year-over-year, so it continues to grow. I don't have any specific statistics about the next several months. The summer time here in Vegas is traditionally a very slow time for convention business probably won't pick up significantly until mid-September. And once again, we participate mainly at the Orleans with that, with the room base we have there and some of the meeting and convention business we have there.

Great. And then maybe a bigger picture question on the distributed gaming business. That's a market that's slowing and maybe lower margin. I was just wondering how Lattner kind of fits into the portfolio longer term.

Yes. I think -- look, we put our toe in the water with respect to that particular niche market for us just to try to begin to understand it. And I think to the extent that it were to be able to legalize in other states, we would consider expanding it. For now, it's largely status quo for us in Illinois, quite honestly. And we leverage -- they get the benefit of some of our technology and marketing capabilities over time. So they kind of get outsized support. And so that's just kind of -- it is what it is.

Thank you, Jordan. Our next question comes from Brandt Montour of Barclays.

Just 1 question, if we could go back to the Midwest & South segment and dig in a little bit on the seasonality for the back half and what I'm really trying to get at is, Keith, you described it as stabilizing here, which is reassuring. I guess if you look back at 2019 seasonality, it would suggests 3Q is typically weaker than Q2, maybe that was an off year, but that would still suggest down comps at the EBITDA level year-over-year in the 3Q. So just maybe you could help us understand the stabilization comment how we should think about that into the third quarter.

Yes. I do -- look, Brandt, this is Josh. I think season, you're not going to stabilization is not going to override seasonality. I think there will continue to be seasonality in the business. All we're trying to say is, is that we saw weakness with respect to specific consumer trends within our Louisiana, Mississippi business, and those particular consumer trends have now started to come back and started to improve. And so it's not to say that we won't see them ebb and flow with respect to the seasonality that normally is characteristic of certain markets or certain business segments. It's just to suggest that we're starting -- that business is starting to get a little bit back on track relative to overall performance. So hopefully, that helps.

Thank you, Brandt. Our next question comes from David Katz of Jefferies.

You covered a lot of ground. I just wanted to, if you don't mind, touch on the dividend, which is well, how you think about growing it over time, how you think about its use and value drive today as it sits and where it could lead one day.

Well, look, we look at returning capital to our shareholders. It was a multipronged approach. So obviously, we have a large share repurchase program committed to and as I said, we'll supplement that with an ongoing dividend program, and we'll return nearly or over $1 billion between the two of them by the end of this year. We think that, look, the dividend is just one element of returning capital. It's up to our Board and how they view this in terms of where it goes each year. I really can't say much more on the dividend than that. I mean we'll be up to the Board to sit and talk about it. But I think I would see it continuing. It's an important part of how we return capital to shareholders. Not all shareholders view getting capital back the same way. Many like share repurchases and some like dividends. And so we're trying to accommodate kind of all of our investors through that.

Understood. And if I can just follow up quickly in another direction with respect to the margin performance, which was actually pretty good, right? I think that's been sort of a recurring focus of how much can you really sustain. How do you view sort of the next few quarters with respect to that? Do you feel like you have, Josh, all the sort of cost under control that you can foresee at the moment and/or should we be just a little more conservative about that?

Yes. My own perspectives, I think our operating teams do a great job managing to the level of revenues that they are seeing come in the door every day, quite honestly. And that's enabled them to offset pressures, whether it's from labor from time to time, from utilities that are seasonally driven. Another big increase that we've seen recently is insurance. But yet, despite those pressures, they get a lot of press, so to speak. The reality is as these guys find ways to kind of offset that and to continue to deliver what I believe to be very consistent levels of margin performance. And we've said from the beginning, coming out of COVID, we weren't going to be able to maintain those levels of margin, but we're going to stay in that neighborhood. And I think we've lived up to that. Our teams have lived up to delivering that. And I'm sure there'll be periods of time where it's not always that way. But generally, I think that this is what you should expect in terms of levels of performance in terms of margins from us.

Thank you, David. Our next question comes from Chad Beynon of Macquarie.

First, I wanted to talk about additional projects in the future organically. Downtown and Treasure Chest, you've kind of laid those out and those have all been in our models, and you've talked about the returns that we should see in the next 6 to 12 months. As we get beyond that, are there other properties where you could make any adjustments, whether it's hotels, casino floors, add, just something to think about getting additional returns within the organic portfolio.

Yes. So we have a number of things that we are considering and evaluating right now, trying to prioritize them. We have several very high-performing properties that we can leverage up an existing strong market and strong management team to further grow at those properties. We don't have anything to announce right now, but we will be prepared to start to lay out what we think those next projects are. But they're in the ZIP code of the 3 months and the Treasure Chest, so it's nothing significant. But once again, we have several very, very strong opportunities to continue to grow those just not ready to talk about them at this point.

And the only thing I would add to that, Chad, is Keith gave you a sense of order of magnitude in terms of size, we're not going to kind of open the floodgate and start so many at one time. It's going to just continue to be paced along just like we did with Fremont and Treasure Chest and kind of double them into the capital allocation process.

Okay. And then in terms of the FanDuel partnership, we're coming up on the 5-year mark. I don't know if this was disclosed or if it's public from when the partnership originally came together. But is there anything that's out there that we should be aware of in terms of terms on the deal that changed after a 5-year mark? Was it a longer partnership. We're just hearing a lot of these 3- to 5-year deals are coming up for renewal?

So I think the short answer is there's really nothing pending or coming up in the short term. Ours were longer-term deals that were structured differently because we had a portfolio type of approach across 9 states and how it all rolled out and what the extension options were in a whole bit. But there's nothing in the short term.

Thank you, Chad. Our next question comes from Joe Stauff of Susquehanna.

Josh, just two clarifications, if I could. You're asked largely on kind of M&A, but capital markets certainly have opened a bit. I was just wondering, maybe if you could describe, say, maybe the number of inbound calls. Is it fair to say that it has increased to some degree? And then I just wanted to ask to clarify your comments on July trends. And correct me if I'm wrong, but I thought you said that in terms of your core customer, the number of visits has increased sort of sequentially versus what you saw in the second quarter, and that spending levels per visit kind of remain consistent. I guess a clarification on that. And I'm wondering if the out-of-town visitors have also, say, increased again relative to your July guidance first 3 weeks?

Yes. So with respect to kind of the core customer comment and the loss -- the trends that we're seeing in early July. I think my comments were that in -- as we looked at those core customers like in Las Vegas, in the second quarter, it really was frequency. We had a few less visits. They were spending the same and the core customer count was generally the same. As we got into the first 3 weeks of July, we're actually seeing more visits. So visits are back and spend is flattish to up. And so positive trends. And as I said, I caution the 3 weeks isn't a permanent trend, but certainly, a turn from Q2. So positive trends thick. And on those are out-of-town customers coming in. In terms of M&A, look, I'm not sure that the call volume has picked up or slowed down. It's always spotty. So I wouldn't say that we're getting more calls or less calls than we've gotten over the last year or 2. I don't know, Josh?

Yes. The only thing I would say is like we're really focused today. It's not so much about M&A unless it's an opportunistic opportunity that comes along. It's really about just continuing to run the business, reinvest in our existing portfolio and return capital to shareholders. And we have the balance sheet to continue to do that in an uncertain environment. And to the extent that something came along that was attractive, we would expect that not to affect kind of our -- the -- how we're thinking about running the business today, but that's just kind of how we're thinking of it. It's not like we're going or we're 2.5x leverage, generating a ton of free cash flow and we're run around looking for things to buy. That's not the attitude of the company internally.

Thank you, Joe. Our next question comes from John DeCree of CBRE.

Maybe just 1 question for me on non-gaming revenue, F&B and room revenue. It's been recovering pretty rapidly. Last quarter, which was a pretty strong quarter. This quarter, it looked like that non-gaming revenue was kind of flattish year-over-year versus the 2Q last year. Curious if you could speak to the trends that you're seeing in that business? Is it more seasonal that we'll see uplift? Is it still recovering? Was just tough comp to last year? I was curious to get your thoughts on those segments.

Yes, John, I'll take it, and then, Keith, if you have something to add, jump in. So like when we look at room revenue by segments. I think what you'll see or eventually when we put it out in our Q is that room revenue in Las Vegas was actually up. And where the softness in room revenue largely came from was the construction disruption in Downtown. And then on the -- in terms of the other kind of segment of non-gaming for us in terms of F&B, we had kind of flattish performance in data but basically growth consistent with what we were talking about in terms of stabilizing and improving trends in Midwest & South. Growth in F&B kind of outside of Nevada. So kind of consistent with what's going on in the business and the commentary of the quarter, that's what's coming through on the non-gaming side of things. Keith, I don't know if there's anything to add or if that covers it.

Thank you, John. Our next question comes from Stephen Grambling of Morgan Stanley.

Two quick follow-ups. First on the digital guidance increase. I don't think I heard you say kind of what you're thinking about with Pala. And as you're talking about this ramp in start-ups, is that usually when there's this increase in effectively customer acquisition, there could be increased losses. So are you assuming that there's going to be incremental investment there that's offset by strength in the rest of the business?

Yes. So as you think about Pala, once again, it's a very small part of the overall business. We bought Pala Interactive. It was profitable, and it will continue to be profitable, but it is small. When we talk about starting marketing, which we started in the month of July, it's small. It's small dollars. It's nothing that's going to change the trajectory of the business. So I wouldn't anticipate this even -- this being visible to anybody.

So Steve, as Keith suggested, it's small. When we acquired it, it was doing about $5 million in EBITDA. And in our projections, we're assuming that it's going to continue to do $5 million of EBITDA for this year as it transitions and builds out its capabilities. It certainly has the opportunity, and we expect it to grow from here but for 2023, it's a formative year for that business to kind of transition the business over to the startups business to our platform and to build out a technical capabilities to kind of continue to grow from here. So this is not -- we're not running the business similar to maybe how our peers are thinking about online where you're used to seeing big marketing budgets and potentially losses early on. That's not what this is about. It's got a healthy little business, and we're not spending more to suggest that it's going to go backwards.

Got it. That's helpful. And then going back to the South & Midwest, you get a lot of commentary there, but I just want to make sure that it's all kind of coming out on the same page, which -- so from an EBITDA standpoint, I guess, you're saying -- are you saying revenue is stabilizing and EBITDA should be stabilizing where we are today? So we shouldn't anticipate just sequentially, it to move around a lot from here?

No, no. Let me -- we're talking about kind of year-over-year performance in terms of -- so let me back up, maybe that's the best place to start. Q4 and Q1, Midwest & South was impacted largely by performance in Louisiana, Mississippi. Those businesses had softness in terms of consumer trends and resulted in revenue and EBITDAR declines that affected the overall segment. We're saying is we -- and the rest of the business was pretty much stable. As we move into Q2, the rest of the business remains stable. And what we're starting to see in Louisiana, Mississippi, is customers' trends starting to inch up and improve. And as a result, the economic or financial performance of the Louisiana, Mississippi assets to follow along. So year-over-year, if we were down a certain amount, we -- those amounts are reducing as we move through time based on sequential performance going from fourth quarter to first quarter to second quarter. And that's what we're talking about. It's not going down any further. It's stabilized or starting to improve. That's what's encouraging from our perspective for Louisiana, Mississippi, and that will only contribute to what's happening in the rest of the Midwest & South. It doesn't mean that going into the third quarter when a certain market is typically down a little bit because of seasonality, you won't still see that or that if Louisiana, Mississippi typically go down in Q3 that you won't see that. We just expect that the underlying trends of the business continue to improve from a customer perspective, quite honestly. And so that's what we're seeing, that's what we're seeing continue. And hopefully, that kind of helps you understand it, if not, we can talk about it further offline. But it's not meant to suggest that we'll lose seasonality. It's meant to suggest that the year-over-year variances should start to diminish.

Thank you, Stephen. Our last question comes from Barry Jonas of Truist Securities.

Just wanted to start. Can you maybe give us an update on any risks around competitive openings we should be mindful of from here?

Yes. So Barry, as it comes to competition, the only, I think, pending opening is obviously the Durango project here in the Las Vegas Locals market. We have had HHR open in Kentucky, which have impacted, and we haven't completely anniversaried their impact at Belterra Resort and Belterra Park in Ohio and Southern Indiana. And then the Four Winds project in South Bend that opened recently, which has had some minor impact on our Blue Chip operation in Northwest Indiana. But once again, those have been open for a while. Durango Station will open whenever they say it's going to open later this year. And my only comment would be, I think, like other openings, and we certainly have a lot of experience with these types of things, opening of new properties, customers will go visit it. They always do. It's a shiny new toy, and the majority of our customers will come back home. And that's generally what we've seen happen over the years. If you look here in the Las Vegas Locals market, when The Palms opened a number of years ago, we had our customers go and visit and the majority of them have come back and it has not had a significant overall impact on either the Orleans or the Gold Coast, which is where it would be felt. And so they'll go visit and we'll be prepared for it. And once again, we certainly have a lot of experience with these type of competitive openings, and we are prepared for it, and we'll see how it goes.

Great. And then I guess just for a follow-up. I believe there was a change in the Board leadership with Mr. Boyd moving to the Chairman Emeritus role and congratulations to him. Just wondering if we should expect a pretty seamless transition from here?

Yes. I would expect nothing has changed and nothing will change, and it will be kind of status quo. The Board is stable, and we have a very solid Board. Everybody is good. And so yes, nothing -- should expect no changes.

Thank you, Barry. This concludes today's question-and-answer session. I'd now like to turn the call over to Josh for concluding remarks.

Thanks, David, and thanks, everyone, for joining today. And if anyone has any follow-up questions on anything we discussed today, please feel free to reach out to the company and we'll try to get those answers -- those questions answered for you. Thank you.

Thanks, Josh. This concludes today's call. You may now disconnect.