Greetings, and welcome to the Penn National Gaming First Quarter Conference Call. [Operator Instructions]. I would now like to turn the conference over to Joe Jaffoni, Investor Relations. Please go ahead.

Thank you, Kamika. Good morning, everyone, and thank you for joining Penn National Gaming's 2020 First Quarter Conference Call. We'll get to management's presentation and comments momentarily as well as your questions and answers. But first, as always, 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 announcement and in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and Form 10-Q. Penn 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. When required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measure 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 it's now my pleasure to turn the call over to the company's CEO, Jay Snowden. Jay, please go ahead.

Thanks, Joe, and good morning, everyone. Really appreciate you joining us on our first quarter earnings call, particularly with everything going on right now. And we hope that all of you and your families are healthy and safe during what are really unprecedented times. Here to present with me this morning is our new Chief Financial Officer, Dave Williams, seated, of course, 6 feet away. And he joined us on March 3 from Apple, obviously, terrific timing on his part. Probably not how you envision your first earnings call, Dave. But we're excited to have you on the team and appreciate your early contributions and, certainly, your outsider perspectives on the business right now given the current environment. I'm also joined this morning by other members of our senior executive team, who, while they always are, have been particularly invaluable to me over the last couple of months as we navigate the unknown and who I may call upon later in the call to help answer some of your questions. To begin with, over the last several weeks, through our press releases, SEC filings, stakeholder letters and this morning's earnings release, we have provided a detailed report on the aggressive mitigation measures we've undertaken enterprise-wide to maximize and preserve our liquidity in response to the COVID-19 outbreak. So we won't spend a great deal of time reiterating what's already been covered, but you will hear from Dave momentarily on that topic. Like many others around the world, we have been profoundly impacted by this pandemic at Penn, and I'm not just talking about the dollars and cents. Tragically, we have lost 3 of our own valued team members to the coronavirus. And of course, it's hard to put into words the heartache and sorrow we all feel for their families'…

Thanks, Jay, and good morning, everyone. I'm glad to be here at Penn. Even though I joined the company at a time of great uncertainty, I've been impressed with our leadership team's ability to move quickly and decisively once the pandemic began, particularly with regard to our swift efforts to preserve liquidity. Prior to the pandemic, our January and February results were very strong. We are performing well ahead of expectations in every segment with property same-store sales growth over 6% and EBITDAR growth of over 15%, driven by more mild winter weather and the introduction of retail sports betting at several properties. While, as Jay said, we won't rehash all the mitigation measures we've taken since our closures, I did want to highlight just a couple. First, we sold the real estate assets of Tropicana Las Vegas to our principal landlord, GLPI, and entered into a ground lease with them on our Morgantown property, providing Penn with $337.5 million in rent credits and the ability to see some potential upside following the property's eventual sale. Second, we reached out and are thankful to those state and local governments, who have provided assistance in the form of deferred license fees, property tax abatements and regulatory expense relief, among others. We also extended payment terms with our vendors and business partners, and we want to thank them for their long-standing friendship, support and willingness to work with us. Our aggressive mitigation measures allowed us to finish March with $730.7 million of cash on the balance sheet. While we are hopeful the majority of our properties will resume on some level of operations by the end of May or early June, if all properties remain closed through the end of the year, our monthly cash burn will be approximately $83 million, including…

All right. Thanks, Dave. I'd like to transition and focus the balance of my time this morning looking ahead to what we believe the future holds for Penn National once the coronavirus crisis is behind us. While exact timing is uncertain, as Dave referenced, we've begun to hear some encouraging news out of Governor's offices around the country that would indicate an end of May, early June time frame for a significant number of our properties to begin to resume operations. Like everyone else at this stage, we're not exactly certain what a limited reopening will bring. However, the ability to safely welcome back valued team members and guests at our properties is positively a step in the right direction and one that we've been anticipating and very much look forward to. One of the key advantages that we have at Penn is our geographic diversification. While -- with operations spread across 19 states and no more than 15% of our revenues derived from any single state, we're well positioned and should see a significant benefit as states begin to open casinos on a sequential basis. In preparation for reopening, our team, led by Todd George, our Executive Vice President of Operations, has been diligently working with our regulators and other governmental health organizations on developing comprehensive new standard operating procedures that include a number of social distancing protocols and other appropriate measures to keep our guests and team members safe when they return. These include increased daily cleaning and sanitation regimens, reducing the number of table game seats and slot machines in play at any one time, reducing the number of seats in our restaurants, installing hand sanitizer stations and wipes around the casino and providing masks for our team members and encouraging use of PPE by our guests,…

[Operator Instructions] And our first question is from the line of Joe Greff with JPMorgan.

Good morning, everybody, and I appreciate your prepared comments, Jay. I was going to ask about breakeven revenue, breakeven EBITDAR levels, but you addressed that, thank you. So my topic really is related to your liquidity. How confident are you guys that the $730 million of cash is sufficient to get to the other side? What other options are available to you to bolster your liquidity position? And then lastly, where does new equity or equity-like capital sit in the pecking order here to the extent you are looking at additional liquidity options?

Sure, Joe. I appreciate you asking the question. And we provided a high-level overview, but obviously, liquidity is and continues to be a focus for all companies right now. And we feel good about our liquidity profile today. We took immediate action after our properties were mandated to close in mid-March due to the COVID-19 outbreak. And we immediately started to negotiate with our principal landlord, GLPI, and I think we came up with a pretty creative solution that provided significant rent relief for us by transacting the Tropicana Las Vegas and Morgantown land assets. And I would also mention that, and I think sometimes it's lost, but we do have valuable joint venture assets like our Kansas Speedway property that we own 50-50 with NASCAR. That is a property that has 0 debt on it and generates significant free cash flow. So we do have options, whether you consider sale-leaseback or recapitalization of assets. Prairie State Gaming is a wholly owned asset in our portfolio. We have significant land holdings through our racetrack, properties in Florida and Texas and are actively engaged in -- with real estate developers that are interested in land in those markets. So we do have a number of options here. And to the last part of your question, look, I guess the good news too is capital markets are open. And every day, you read about a new transaction, whether that's on the debt side, the equity side, convertible instruments. The markets are open. And of course, we're continuing to consider all of our options, have been and will continue to. We have liquidity, as you do the math, that gets us through the end of this calendar year in, really, what is a draconian scenario that we don't in any way anticipate given that we do have visibility to property reopenings in the coming weeks, second half of May and early June, we think a number of states are going to be allowing casinos to reopen on a limited basis. So a scenario in which we have 0 revenue between now and the end of the year, we just don't see as likely. But even in that scenario, you've got a liquidity path through the end of the year. And we'll continue to consider our options, which are several, that I mentioned and capital markets as well.

Great. And then switching over to the launch of the Barstool Sports book app. Can you remind us what those launch development costs are for this year? I presume they're all onetime in nature, correct if I'm wrong on that, and included in that $83 million per month average cash burn you referenced in today's release.

Yes. We have a team right now, Joe, of around a little over 100 product developers and engineers. They're all still working hard. They're working hard remotely, of course, versus in an office. But they're all continuing to work on that product. I would tell you, to my surprise and delight, we haven't lost any ground on the time line. And we haven't incurred any additional costs by transitioning to more of a remote environment. And what I would tell you on the cost side is that we obviously are continuing to build out that team, and until such time as we launch the app, the costs associated from a payroll standpoint and a development engineering standpoint hit below the line. So you're not going to see that impact EBITDA in the short term. And we're continuing to make investments in that, and Dave covered in his opening remarks that we think around $10 million between now and the time that we launch that app to continue to invest in the development of the app as well as launching Barstool-branded sports books at our brick-and-mortar casinos and rebranding the ones that are not currently Barstool branded.

Our next question is from the line of Thomas Allen with Morgan Stanley.

Just on the operations side, thanks for the breakeven numbers, but just can you help us think about the cost structure of operating the casinos when you're reopening? You highlighted a lot of incremental measures around cleaning. Do you think cost will be higher or lower? How should we think about it?

Well, as Dave mentioned, Thomas, we believe that, that breakeven EBITDAR level at the property. Property by property, it's a bit different, of course, because you have different tax rates and cost structures and nongaming amenities and things of that nature. But I think it's safe to assume that if our properties are reopen and generating 25% to 30% of pre COVID or just consider at prior year level revenues that once we hit that threshold, we're better off having the properties open than the current environment where they're all closed. And look, we're obviously going to be really thoughtful in terms of how we reopen the properties, and we're taking a conservative approach. So hopefully, we are maybe understaffed and a bit overwhelmed, but we much prefer that model where we're calling more of our team members back in off of furlough in a pinch as opposed to staffing up too heavy and then realizing that the revenues aren't meeting our expectations. So you can assume that we will only ramp our spend both on the OpEx and CapEx side of our business as we see these businesses reopen, understand what that supply-demand balance/imbalance looks like, and they're ramping to our expectations. And if that happens, obviously, we're only going to be adding incremental costs as we're seeing revenues go well beyond 25% and 30%. So that's what -- I guess, hopefully, answered your question.

Yes. Sorry, Jay, I should have worded it better. Long term, do you think that on a per casino basis, costs will be higher or lower than they were before, right? So do these incremental costs mean that it's going to be higher? Or do you think that everyone has learned that they can operate more efficiently? And then just as my follow-up for if there are any regulatory affairs people on the line, what states you are most optimistic around legalizing iGaming and sports betting?

Sure. So sorry about that, Thomas. I misunderstood your question the first time through. And what I would answer and say is that there's obviously going to be some incremental costs when you think about some of the measures we're taking from a sanitary and cleanliness standpoint. But I would also tell you that the way that we're thinking about our business today, everything that we do and how we do it from 2 months ago to where we are today, we're rethinking, we're reimagining. And just to give you some ideas, and we talked about technology enhancements, we still, as a company, this is a mind blowing number in my opinion, but we still, as a company, spent almost $20 million a year in direct mail production and postage. And so you talk about opportunities to move forward. I think we all agree with Satya Nadella's comment during the Microsoft earnings that there's been about 2 years' worth of digitization of our economy in the last 2 months. And there isn't a set of grandparents out there that aren't Zooming with their grandkids and e-mailing and texting and sending emojis. So this opportunity for us to operate more efficiently goes well beyond things like payroll. It goes around technology. We're still an industry, probably the last out there, that transacts only in cash. So we're working with our regulators right now to see if we can really accelerate this digitalization of payments on our properties, which brings a tremendous amount of benefits to us. So -- and then, of course, from a labor standpoint, we're going to be really thoughtful around how we ramp back up what our operating model looks like at the property level and, of course, at the corporate level as well. We're rethinking everything that we had been doing and need to do on a go-forward basis. So the net of all of that is, I think you'll find that these businesses can operate more efficiently than they did pre-COVID, but it's very fluid, and we're going to have to see how it goes once we reopen the doors and understand what that demand profile looks like. Second part of your question, with regard to states and legalization efforts, I would just tell you it's very active right now in conversations we're having today. There's certainly more of a sense of urgency at the state level of considering acceleration of sports betting legalization for states that have not gone down that path. And iCasino as well and even states that have already legalized, take Michigan as an example, I think there's some interest in maybe accelerating the time line to implement versus what it was pre-COVID. So without getting into specifics state-by-state because a lot of these conversations are not public, I would tell you there's a great deal of interest to accelerate sports betting to iCasino across most of our jurisdictions.

Our next question is from the line of Felicia Hendrix with Barclays.

And it's so nice to hear all of you this morning. I just want to start out with a clarification because I'm not sure the question was actually answered earlier, Jay. That $8 million to $10 million of CapEx on the sports book branding, is that in your cash burn?

That number is in our cash burn, yes, Felicia.

Okay. Great. And then just bigger picture, as you guys are thinking about your casino openings, just wondering what lessons you're taking, if any, from the few casinos that have opened already? And then also, how are you simultaneously thinking about that and the economy? I mean, you know well, if we look back to '08 and the time it took for regional GGR to recover, there was a high correlation to unemployment. So with the unemployment rate likely to remain high or higher than it was before, how do you see the regional casino recovery unfolding this time? And what are your plans to drive demand generally?

Yes. Great question, Felicia. And look, there's very limited sample to go off of in terms of casinos that have reopened to-date. There's a couple of tribal -- Coeur d'Alene in Idaho. And we're reading up as much as we can on what they've done. And look, the preventive or precautionary measures they've taken around COVID are very similar to the things that we're considering and that I covered in my prepared remarks. And you can envision a casino that every other slot machine is turned off and table games, maybe there's 2 or 3 seats versus the 6 or 7 standard seats, restaurants are open on a limited basis, probably a lot more grab-and-go, sit down, disposable utensils, things of that nature. So those are what -- that's what we're considering. We want to make sure that any and all of the decisions we make are going to create a really safe environment for our team members and for our guests and that people feel comfortable. And if you read, at least with the casino in Idaho that I've been reading the feedback and social media responses, that's been very positive, both on the customer side and the team member side as they've reopened their doors, and demand has been strong. So look, every market is going to be different. I don't think you can extrapolate a whole lot from 1 or 2 casino openings in the last few days. But we have a plan. We feel good about the plan. And we also feel like we're very much aligned with our state leaders and regulatory partners on how and when to reopen state by state. Look, and then your question about how do these businesses potentially ramp back up, we could probably ask people on this call and…

And then just on my follow-up on the breakeven commentary, if you're thinking about breakeven on a free cash flow basis after all corporate and rent obligations, obviously, that breakeven is higher. So just wondering how you're thinking about that. And then just putting into that calculus, how we should think about corporate expense quarterly -- on a quarterly run rate during the shutdown period, but then also as you ramp up?

Yes. I'll tackle the second one around corporate expense, then I'll ask Dave to answer your question around free cash flow and the variables around free cash flow breakeven. On the corporate expense side, we're still working through our models right now. And that corporate expense is -- it's going to be conservative and it's going to ramp as our businesses reopen and as our revenues ramp. We have to be thoughtful and mindful around that. And I think it's safe to assume that even back -- when we get back to 90% to 100% of our pre-COVID revenue levels, that corporate expense is going to be lower than it was pre-COVID. So we're working on that. I don't have a whole lot more to share. We will, obviously, as the months track on, I think next earnings call, Felicia, we'll have a lot more that we can share with you on corporate expense, but just assume it's going to continue to be a conservative approach, much like the way we're thinking about ramping up and the cost structure at our properties. Dave, you want to talk about the variables of the free cash flow breakeven?

Sure, Jay. Felicia, I think, as Jay said, there's a lot of unknowns here. We don't know when we're going to open and at what rate. So we also have to look at that at a property-by-property basis. And so it becomes pretty complicated. But I think that if we look at the components of what we have making up our free cash flow, cash tax now until we ramp up significantly are going to be much lower. Our CapEx, as I said, are going to be minimal. The interest expense, you know that, it's in our earnings, and you also know the rent. So when we talk about achieving 25% to 30% of last year's revenue to break even on EBITDAR, I think you can get most of the way there. Once we start reopening properties, we'll be able to manage that very carefully, and we're going to be able to manage our cash and we're going to be able to manage our operational efficiencies very closely.

Our next question is from the line of Steve Wieczynski with Stifel.

So Jay, wanted to ask you a bigger picture question about Barstool. And I understand you did this transaction as a way of materially lowering your upfront acquisition costs. But I guess I wanted to ask about retention costs and how you think about those, especially in this kind of environment? And I guess what I'm getting at here is, I'd have to assume with the sports betting market being shut down, as that opens back up, the online sports betting market will be ultra-competitive. And if some of your competitors are out there giving away all kinds of stuff to attract customers, how will you guys and Barstool react to that type of environment? I hope that makes sense.

It does, Steve. It's a good question. And we don't know, right? We don't know when sports are going to be live again. We also don't know how many states are going to be legal at that point and what does the competitive set look like. So there's a lot of question marks there. What I would tell you is that we feel strongly, and we said this on January 29 when we announced our investment -- strategic investment in Barstool Sports is that there's so many benefits to the way that we structured this investment. And a couple of them is, we made an investment to own 36% of Barstool. But on a go-forward basis, we are exclusive partners with Barstool for all things related to sports betting and iCasino, anything casino related, period. And so we get 100% of that attention from Barstool and we're very much aligned with our partners there because they own Penn equity, and what's good for Penn is good for the folks at Barstool as well. So we're all very much aligned on really leveraging their 66 million -- it's a lot higher than that now -- 66 million was the last official number we had from last year, fans. And there's ways to do that, that I think are very compelling and very unique. And they have so many platforms, and they produce so much content, and you can envision the Barstool-Penn relationship really playing out and being fully integrated across all of those platforms and all of their personalities at Barstool. So there's ways that we can do things that others just simply can't. They may have a great platform or a strong brand, but they don't necessarily have people behind that brand that have loyal followings that are continuing to…

That was very helpful. And the second question, I'm not sure if you're going to know the answer to this, and I'm not sure you're fully entrenched yet with Barstool. But is there any way to help us think about what advertising revenues have looked like over there the last couple of months? And I guess what I'm trying to get -- trying to figure out here is, given their strong online presence, have you seen any kind of material slowdown with ads in this environment? Or have those been pretty resilient?

Yes. I would answer it this way, Steve. In my conversations with Erika, I think have certainly been more resilient than most digital media companies. And if you consume Barstool content, you'll continue to see that there are no shortage of advertisers. Some of them have changed. Some have stayed the same. So I would tell you that they are continuing to be creative as they always are around their business. But I think every company has had to think differently about how they run their business, as Erika and Dave and team are at Barstool. But as I highlighted in my prepared remarks, their followers, social media, video blog -- video and blog, excuse me, are through the roof, 9 million TikTok followers. So their relevance is better today than it's ever been, which obviously is very exciting for us as we think about this launch coming up in -- later in the third quarter. And I'm not concerned about their financial performance. I have clear visibility to it. Erika and I talk about it all the time. And they're making the appropriate adjustments as all businesses are right now.

Okay. And can I ask, Dave, a housekeeping question? If you said this, Dave, I apologize. But this $600 million impairment charge during the quarter, did you say what that was related to?

No. I didn't get into it. But what I can tell you is that we had a trigger event as a result of the temporary closures of the properties and that basically required us to do a test of our intangible assets and goodwill under the accounting literature. And we recorded a total of $616 million of impairment charges, primarily related to gaming licenses, trade names and goodwill.

Our next question is from the line of Shaun Kelley with Bank of America.

Jay, I was hoping if we could dig in a little bit deeper on just some of the -- a little bit of the state-by-state dynamics. So maybe a 2-part question. First of all, for the reopen, I think you talked broadly about some ideas around towards the end of the month here in May and then early June. But what states are you watching more specifically? I think we've heard some commentary coming out of Louisiana that Memorial Day, could be a soft circle target. Yes, I think Mississippi has been mentioned and then kind of mentioned in different phase. Just maybe a handful of states for investors to keep an eye on just because we're all going to be tracking this kind of in real-time would be a great start.

Yes. I'll tell you what I can, Shaun. I mean it's very, very fluid. And conversations are being had hourly. And we're working with health authorities and state officials and our regulators, and I would just tell you generally that the states you mentioned, I think there's been some public comments around that. So you can go off of those Mississippi, Louisiana, I think, have talked about maybe a Memorial Day target. And then you've got, look, a number of properties in the Midwest that have just been impacted differently. Not every state is created or looks the same in terms of COVID impacts and what that curve looks like, how it flattened out, when it flattened out, the death rate, et cetera. So we're all staying close to this. I think that's the best I can tell you. I would imagine that if I had to say today, somewhere between 3 and 5 states would likely to be reopening in some partial limited capacity in May. And I think you'll see the bulk of the remaining states where we operate probably go live in June. There may be an exception or two to that sort of outlook. And without getting into too much specifics, I think it's probably safe to model around that.

That's helpful, and I appreciate that. And then the follow-up is, we've also seen some states starting to talk about potential and varying proposals for tax relief for the gaming operators. I think the 2 that have been out there or that I'm aware of at least are in Atlantic City, some direct proposals, and then in Louisiana, some discussions around, I think, taxes or removal of taxes on some of the promotional credit piece. Can you talk a little bit more about that? How much of this coming up in your dialogues with states? Is it something that you're seeing some flex on? Because obviously, they've got a desire to help you be a healthy industry. And on the flip side to try and get tax revenues in the door. So that's going to be 2 competing interests that they've got to balance when they're thinking about helping you out. So just how is that conversation going? And where could it apply for Penn?

Yes. Well, let me start by saying that our state partners have been -- and local partners have been terrific to-date. We've received abatements from a property tax standpoint in a number of cases. There have been relief actions and there continue to be relief discussions around tax rates in general and regulatory fees and license fees and things of that nature. So I would just tell you, it's very active. There is that natural tension that you described. So it's not the same in every state. Some states, the tax rates are really high. And they give you tax-free promotional credits; in other states, they don't. And so I would tell you that right now, I can't think of anything that you mentioned or anyone else has that isn't on the table for discussion, and continues to be active dialogue. I think, in some states, obviously, more active than others, but these are topics of conversation that we're having daily at this point.

And maybe just as the last would be, could you at least dimensionalize something like Louisiana for us? Like how impactful could that be to the overall when you switch something like tax on a promotional credit like that? Is that a nice job? Or could that be material for the financials? Not overall, but to the state level performance.

Yes. Well, look, Louisiana is a super important state for us. We're the largest operator of casinos in Louisiana. And it's right there with Ohio and Missouri for us in terms of states where we generate the most revenue in the portfolio. So it would be material and certainly not just at the state level, but for us, given our presence in Louisiana, you would notice it, I think, at the corporate level as well if something like that happened. It's in the millions of dollars per year. I don't have the number in front of me, but just rest assured that it's -- that is a meaningful opportunity for us, and we'll see where the conversations go.

Our next question is from the line of Barry Jonas with SunTrust.

Jay, a lot of good commentary on the call, but I guess maybe more at a higher level, what do you think the longer term impact to your businesses could be from this crisis?

Yes. Look, Barry, we're modeling about 27 different scenarios because no one knows exactly. I would just tell you that we're preparing for any and all of those. And I think probably safe to say, Barry, that we think that in an environment where revenues maybe don't come back completely to where they were pre-COVID in the next year, 1.5 years, we think we can get our EBITDAR levels back to where they were. That's sort of the way we're thinking about it. As revenues in the next year go from 30 to 40 to 60 to 70 to 75, what we're continuing to try to solve for is what are the decisions that we can make from a technology standpoint, from how we manage the business, from what our corporate and property structures look like, from what's centralized versus decentralized. We're whiteboard-ing, as we should, everything that we have done historically in order to try to run this business as profitably as we can under a variety of different scenarios. So we're still working through that. But just know that we don't have to get back to even 95% of where revenues were in order to be generating the EBITDAR that we were generating pre-COVID.

Okay. That's great. And then maybe this is not a question for today, but in terms of new markets, a, what would you need to see to exercise the option for the GLPI Perryville asset? And then I guess, b, we've seen assets in Atlantic City go for somewhat nominal amounts. Is that a market you want to enter just to get that full license beyond the sports betting deal you've announced?

Well, here's the way we're thinking about M&A is that, one, obviously, right now, focus primarily is on liquidity and ensuring that we fortify the balance sheet, and that's something we've been doing, and we will continue to do as we move forward. But, look we are -- and I think I mentioned this on the last call, but as we think about M&A going forward, whether you're in a COVID environment or not, is that for us to make further investments on the brick-and-mortar side, it's got to really be strategic -- a good strategic fit for us. Perryville is a great example of that. Greektown in Michigan was a great example of that, where those give you access not just to a brick-and-mortar opportunity that you think is valuable with upside that you can generate higher EBITDA than maybe the previous owner because you have more scale and things of that nature, so on the synergy side, but importantly, it's given you access to what we've been talking about for the last several quarters of this sports betting and online casino opportunities. So what would we need to see from Perryville, we have to make sure, obviously, that we have appropriate liquidity to move forward on that option. We anticipate being able to do that. And we have -- if we announce that we're moving forward on that option by the end of this calendar year, we have until the end of '21 to execute on the option. So we can buy ourselves some time, but importantly, that's access to a significant population that we don't have access to today. Now specific to Atlantic City, we do have access to New Jersey from a sports betting standpoint by virtue of our joint venture with parks at Freehold, the racetrack in New Jersey and there are skins available for iCasino. So we're not looking at anything per se in Atlantic City right now. But safe to assume that anything we would do on the brick-and-mortar M&A side would have to be a strategic fit for Penn.

Our next question is from the line of Harry Curtis with Instinet.

Two questions for me. In your written comments, you commented that January and February were quite strong in part because of the strength in sports betting. Can you give us a sense of some of the metrics around that strength with respect to incremental visitation to the casinos and spend per customer, please?

Sure, Harry. And we actually provided some pretty good detail on our last call around our Hollywood Lawrenceburg property, that in the fourth quarter -- sports betting in fourth quarter of '19, no sports betting in fourth quarter of '18. And we saw table game volume and win growth of 20%, food and beverage growth of 20%, even slot business grew low single digits in a market that -- and at a property that had been in decline by virtue of competition in Ohio for years. So yes, those are the kind of trends that we had been seeing during the pre-COVID environment. I would just tell you just sort of glancing at property results here in front of me, if you consider the properties that have newly launched sports book such as our Charles Town property in West Virginia; our 2 properties in Indiana, Lawrenceburg and East Chicago; our Vicksburg property in Mississippi. There are 4 larger properties that have sports books, and their sports books are relatively new. You're looking at revenue results for January and February and EBITDA results for those 4 properties that are double what Dave shared with you as the average for the company. So you're looking at revenues that were north of 10% year-over-year and EBITDA that was closer to 30% growth. Now I'm not saying that, that's entirely due to sports betting, but I think you're seeing that the properties that have sports books of scale, it drives results largely on the table games and nongaming side and the flow-through is really good.

Very good. And then my second question goes back to the 2 casinos in Pennsylvania, where you've halted construction. Probably some -- the reasons behind that, perhaps liquidity driven, but I was also interested in -- given the fewer gaming positions permitted when you reopen and who knows how long that will last, but are you rethinking how you design the casinos, what you expect to invest in the casinos and what your expected ROIC is?

Well, Harry, yes is the answer. I mean we're reevaluating everything. And we believe that both of those projects, in the aggregate, as we've shared before, are very good return projects, but are we thinking about number of slot machines and the layout in food and beverage offerings and sports betting and all of the gaming, nongaming amenities, how we structure those properties and how we think about the marketing efforts, absolutely. All of those things are on the table. And we would expect that if we're moving forward, not yet, but when we're moving forward with the construction of those 2 facilities, it's because we believe that the ROIC is very similar and hopefully better than it was when we initially announced these 2 projects. So we don't have a firm time line. Obviously, liquidity is king right now. But there are 2 projects that we still feel good about, and we'll reimagine them like we're reimagining everything else in the company.

Do you think -- just as a quick follow-up, do you think that it's likely that you'll restart construction sometime this year? Or is it probably pushed into next year?

It -- 100% dependent on how many businesses have opened and what the ramp looks like, and cash flow, free cash flow. There's a lot of factors there, Harry. I think if we're moving forward with the build-out of those properties before the end of the year, we're feeling really good about how things have ramped and about the COVID environment, and we've been successful in safely opening up our properties and they're ramping to our expectations. So I don't want to put a hard date on it. Just know that we do believe in these projects and their return profile.

Our next question is from the line of John DeCree with Union Gaming Group.

Two, Jay. One on kind of gaming capacity utilization. I think you mentioned in a recent question that you don't necessarily need to get back to 2019 gaming revenue to get to those EBITDAR levels. But as we think about the casino floor being reconfigured, something like every other slot or fewer seats per table, can you get back to prior gaming levels with less capacity? And it's probably not an exact science, but how should we think about as gaming capacity comes back online? How much ability do you have to exceed capacity with demand?

Yes. We're going to have to see how this plays out, John, but I would tell you this. Todd and our operations team and Jennifer Weissman, our CMO, we're all thinking about how do we best yield the available supply that we have so you can think about maybe your -- sending offers to customers based on worth and they have ability to come in and participate during certain times of day or days of week. And you have to be really thoughtful if you're limited from a capacity standpoint of how do you maximize your yield inside the casino. So -- and that might be different market-by-market and state by state. Some of our properties, honestly, were built for Easter Sunday decades ago and they're bigger than they will ever need to be again. So it's pretty easy for us to loosen up the floor, take machines off and maybe you're still at 50% of fire code, but your capacity feels good and there's energy. And in others where it's -- there's a lot more demand, it's probably going to be every other slot machine turned off. But if you've got a higher worth customer on average that's in your facility, then you could probably generate even at 50% capacity, higher than 50% of revenues. But we're going to have to see how all of this plays out. We're certainly thinking through that yield equation.

Got it. That's helpful for now. And then one additional question on relief, I guess the CARES Act specifically. Have you guys been able to quantify or think about -- it might be too soon to quantify, but some of the benefits like payroll tax credits, carrybacks, interest deductions. Is that going to be meaningful for your company? Is it millions or maybe tens of millions of dollars on the other side? Kind of any thoughts or framework around how you're thinking about that would be helpful.

Sure. Dave, you want to tackle that one?

Sure. John, the facts and the guidance have bounced around a little on this. So it's hard to give an exact number. But based on our preliminary evaluation, we currently believe that we'll qualify for certain refundable payroll credits, deferral of certain payroll taxes and NOL carrybacks, and immediate expensing eligible, qualified improvements. So with all of that, we're anticipating receiving an estimated tax refund between $40 million and $50 million within the next 12 months. And that's primarily due to the NOLs.

That's helpful, Dave. I appreciate it. And welcome to the team. Looking forward to meeting you at some point soon.

And Kamika, we're out of time here. So really wanted to thank everybody for joining us this morning, especially with everything going on, and stay safe. We look forward to having a lot more to share with you in terms of how our businesses have reopened and the progress that we're making across our portfolio as well as the development of our sports betting app, which at the next time we talk will be soon to launch and, hopefully, sports are ready to go live as well. So thanks, everybody. Stay safe. And talk to you all soon.

That does conclude the conference call for today. We thank you all for your participation, and we ask that you disconnect your lines. Thank you, and have a great day.