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The following is a summary of the principal risks that could adversely affect our business, operations, and financial results.
−Removed: Risks Related to Our Business and Industry
−Removed: • Our business is sensitive to reductions in discretionary consumer spending as a result of downturns in the economy and other factors outside of our control.
−Removed: • Intense competition exists in the gaming and entertainment industries, and we expect competition to continue to intensify.
+Added: Risks Related to Our Business, Industry and Market Conditions
+Added: • Our business is sensitive to reductions in discretionary consumer spending because of downturns in the economy and other factors outside of our control.
+Added: • Intense competition exists in the gaming, media, and entertainment industries, and we expect competition to continue to intensify.
• Our results of operations may fluctuate due to seasonality and other factors and, therefore, our periodic operating results will not be guarantees of future performance.
−Removed: • Negative events or negative media coverage including relating to, or a declining popularity of, sports betting, the underlying sports, teams or athletes and related talent, and/or online gaming may adversely impact our reputation, which could have an adverse impact on our business.
−Removed: • Our projections are subject to significant risks, assumptions, estimates and uncertainties, including assumptions regarding future legislation and changes in regulations, both inside and outside of the United States.
−Removed: As a result, our projected revenues and profitability may differ materially from our expectations.
−Removed: • Consolidation among gaming equipment manufacturers could impose additional costs on us.
−Removed: • Our business and operations have been, and may in the future, be adversely affected by epidemics, pandemics, outbreaks of disease, and other adverse public health developments, including COVID-19.
+Added: • Shareholder activists could cause a disruption to our business.
Risks Related to Our Operations
−Removed: • We have certain properties that generate a significant percentage of our revenues and our ability to meet our operating and debt service requirements is dependent, in part, upon the continued success of these properties.
−Removed: • We are required to utilize a significant portion of our cash flow from operations to make our rent payments under our Triple Net Leases, which could adversely affect our ability to fund our operations and growth and limit our ability to react to competitive and economic changes.
+Added: • We have certain retail properties that generate a significant percentage of our revenues and our ability to meet our operating and debt service requirements is dependent, in part, upon the continued success of these properties.
+Added: • A significant portion of our cash flow from operations is used to make interest payments and rent payments under our debt and lease agreements.
+Added: • We may require additional capital to support our growth plans, and such capital may not be available on terms acceptable to us, if at all.
• Most of our facilities are leased and could experience risks associated with leased property.
−Removed: • Our operations could be disrupted if management agreements and/or leases with third parties and local governments are not renewed.
−Removed: • There can be no assurance that we will be able to compete effectively or generate sufficient returns on our recently expanded sports betting and online gaming operations, including our acquisition of Barstool and theScore.
+Added: • We are subject to risks and costs related to climate change regulations and greenhouse gas effects.
+Added: • Investors’ and other stakeholders’ expectations of our performance relating to environmental, social, and governance factors may impose additional costs and expose us to new risks.
+Added: • Our management agreements and/or leases with third parties and local governments may not be renewed.
+Added: • There can be no assurance that we will be able to compete effectively or generate sufficient returns on our recently expanded sports betting and iCasino operations, including ESPN BET.
• Our operations and their success are largely dependent on the skill and experience of management and key personnel.
−Removed: • Our business could suffer if we cannot attract and retain talented team members.
−Removed: • Collective bargaining activity and strikes could disrupt our operations, increase our labor costs, and interfere with the ability of our management to focus on executing our business strategies.
−Removed: • If we fail to detect fraud or theft, including by our users and employees, our reputation may suffer which could harm our brand and reputation and negatively impact our business, financial condition and results of operations and can subject us to investigations and litigation.
+Added: • Our business is dependent on our ability to attract and retain talented team members.
+Added: • We face risks related to collective bargaining activity and strikes.
+Added: • We face the risk of fraud, theft, and cheating.
• We rely on, among other things, copyrights, trademarks, trade secrets, confidentiality procedures, and contractual provisions to protect our intellectual property rights and we may be unable to protect or may not be successful in protecting our intellectual property rights.
−Removed: • Our commercial success depends upon us avoiding the infringement of intellectual property rights owned by others and any such infringements, including those that are inadvertent, may have a material adverse effect on our business.
−Removed: • Our technology contains third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could restrict our ability to provide our offerings.
−Removed: • We may face disruption and other difficulties in integrating and managing properties or other initiatives we have recently acquired, may develop, or may acquire in the future.
−Removed: • We lease facilities that are located in areas that experience extreme weather conditions.
−Removed: • We rely on third-party payment processors to process deposits and withdrawals made by our online sports betting and iCasino users, and if we cannot manage our relationships with such third parties and other payment-related risks, our business, financial condition and results of operations could be adversely affected.
−Removed: • If our third-party mobile application distribution platforms or service providers do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition, and results of operations could be adversely affected.
−Removed: • If internet and other technology-based service providers experience service interruptions, our ability to conduct our business may be impaired and our business, financial condition and results of operations could be adversely affected.
−Removed: • We rely on third party cloud infrastructure services to deliver our offerings to users.
−Removed: Any disruption of, or interference with, our use of these services could adversely affect our business, financial condition, results of operations, and prospects.
−Removed: • We rely on strategic relationships with casinos, tribes and horse tracks in order to be able to offer our sports betting and online gaming products in certain jurisdictions.
−Removed: If we cannot establish and manage such relationships with such partners, our business, financial condition and results of operations could be adversely affected.
−Removed: • We rely on other third-party sports data providers for real-time and accurate data for sporting events, and if such third parties do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition and results of operations could be adversely affected.
+Added: • Our commercial success depends upon us avoiding the infringement of intellectual property rights owned by others.
+Added: • Our technology contains third-party open source software components.
+Added: • We may face disruption and other difficulties in integrating and managing acquired operations or other initiatives we have recently acquired, may develop, or may acquire in the future.
+Added: • We lease facilities that are located in areas that experience extreme weather conditions, which may increase in frequency and severity as a result of climate change.
+Added: • We rely on third parties to provide services that are essential to the operation of our online sports betting and iCasino business, including geolocation, identity and age verification, payment processing, and sports data.
• Our growth will depend, in part, on the success of our strategic relationships with third parties.
−Removed: Overreliance on certain third parties, or our inability to extend existing relationships or agree to new relationships may cause unanticipated costs for us and impact our financial performance in the future.
−Removed: • Our information technology and other systems are subject to cyber security risk, including misappropriation of employee information, customer information or other breaches of information security, particularly as our Interactive segment grows.
−Removed: • Our growth prospects may suffer if we are unable to develop successful offerings or if we fail to pursue additional offerings.
−Removed: In addition, if we fail to make the right investment decisions in our offerings, we may not attract and retain key users and our revenue and results of operations may decline.
−Removed: • The growth of our Interactive segment will depend on our ability to attract and retain users.
+Added: • We are reliant on our partnership with ESPN, and our failure to maintain that relationship could negatively impact our business, reputation, and strategic goals.
+Added: • The growth of our Interactive segment will depend on our ability to attract and retain users and require investments in our online offerings, technology, and strategic marketing initiatives.
• Participation in the sports betting industry exposes us to trading, liability management, and pricing risk.
−Removed: We may experience lower than expected profitability and potentially significant losses as a result of a failure to determine accurately the odds in relation to any particular event and/or any failure of our sports risk management processes and controls.
• We follow the sports betting industry practice of restricting and managing betting limits at the individual customer level based on individual customer profiles and risk level to the enterprise;
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• We extend credit to a portion of our customers who wager at our retail properties, and we may not be able to collect gaming receivables from our credit customers.
−Removed: • The success, including win or hold rates, of existing or future retail and online sports betting and online gaming products depends on a variety of factors and is not completely controlled by us.
−Removed: • We face a number of challenges prior to opening new or upgraded gaming properties or launching new online gaming or sports betting channels, which may lead to increased costs and delays in anticipated revenues.
−Removed: Risks Related to Our Capital Structure
−Removed: • Our indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under our outstanding indebtedness.
−Removed: • The lack of availability and cost of financing could have an adverse effect on our business.
−Removed: • To service our indebtedness, we will require a significant amount of cash, which depends on many factors beyond our control.
+Added: • The success, including win or hold rates, of existing or future retail, sports betting, and iCasino products depends on a variety of factors and is not completely controlled by us.
+Added: • We face a number of challenges prior to opening new or upgraded gaming properties, launching iCasinos and sports betting in new jurisdictions, or launching new iCasino or sports betting offerings.
+Added: Risks Related to our Information Systems and Technology
+Added: • If our third-party mobile application distribution platforms or service providers do not perform adequately or terminate their relationships with us, our costs may increase.
+Added: • If internet and other technology-based service providers experience service interruptions, our ability to conduct our business may be impaired.
+Added: • We rely on third party cloud infrastructure services to deliver our offerings to users.
+Added: • Our information technology and other systems are subject to cybersecurity risk, including misappropriation of employee information, customer information or other breaches of information security.
Legal and Regulatory Risk Factors
−Removed: • We are or may become involved in legal proceedings that, if adversely adjudicated or settled, could impact our financial condition and results of operations.
−Removed: • We face extensive regulation from gaming regulatory authorities, which could have a material adverse effect on us.
−Removed: • We are subject to certain federal, state, provincial and other regulations, and if we fail to comply with such regulations, it could have a material adverse effect on our financial condition, results of operations, and cash flow.
+Added: • We are or may become involved in legal proceedings and no assurance can be provided as to the outcome of these matters.
+Added: • We face extensive regulation from gaming regulatory authorities.
+Added: • We are subject to certain federal, state, provincial, and other regulations.
• State and local smoking restrictions have and may continue to negatively affect our business.
−Removed: • Changes to consumer privacy laws both inside and outside of the United States could adversely affect our ability to market our products effectively and may require us to change our business practices or expend significant amounts on compliance with such laws.
−Removed: • We are subject to environmental laws and potential exposure to environmental liabilities which could have an adverse effect on us.
−Removed: • Material increases to our taxes or the adoption of new taxes or the authorization of new or increased forms of gaming could have a material adverse effect on our future financial results.
+Added: • Changes to consumer privacy laws could adversely affect our ability to market our products effectively and may require us to change our business practices or expend significant amounts on compliance with such laws.
+Added: • We are subject to environmental laws and potential exposure to environmental liabilities.
+Added: • We may experience material increases to our taxes or the adoption of new taxes or the authorization of new or increased forms of gaming.
The summary risk factors described above should be read together with the text of the full risk factors below and in the other information set forth in this Annual Report, including our consolidated financial statements and the related notes, as well as in other documents that we file with the SEC.
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Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial may also materially adversely affect our business, prospects, financial condition, and results of operations.
−Removed: Risks Related to Our Business and Industry
−Removed: Our business is sensitive to reductions in discretionary consumer spending as a result of downturns in the economy and other factors outside of our control.
+Added: Risks Related to Our Business, Industry, and Market Conditions
+Added: Our business is sensitive to reductions in discretionary consumer spending because of downturns in the economy and other factors outside of our control.
Our business is particularly sensitive to downturns in the economy and the associated impact on discretionary spending on leisure activities.
As a regional operator, our in-person customers are predominately local, so we compete for more day-to-day discretionary spending as compared with destination spending.
−Removed: Decreases in discretionary consumer spending or consumer preferences brought about by factors such as perceived or actual general economic conditions, effects of declines in consumer confidence in the economy, any future employment and credit crisis, the impact of high and prolonged inflation, particularly with respect to housing, energy and food costs, the increased cost of travel, decreased disposable consumer income and wealth, fears of war and future acts of terrorism, or widespread illnesses or epidemics, including COVID-19, can have a material adverse effect on discretionary spending and other areas of economic behavior that directly impact the gaming and entertainment industries in general and could further reduce customer demand for the products and amenities that we offer, which may negatively impact our revenues and operating cash flow.
+Added: Decreases in discretionary consumer spending or consumer preferences brought about by factors such as perceived or actual general economic conditions, effects of declines in consumer confidence in the economy, any future employment or credit crisis, the impact of high and prolonged inflation, particularly with respect to housing, energy, and food costs, the increased cost of travel, decreased disposable consumer income and wealth, fears of war and future acts of terrorism, or widespread illnesses or epidemics can have a material adverse effect on discretionary spending and other areas of economic behavior that directly impact the gaming and entertainment industries in general and
+Added: could further reduce customer demand for the products and amenities that we offer, which may negatively impact our revenues and operating cash flow.
+Added: The closing of our properties due to the COVID-19 pandemic caused significant disruptions to our ability to generate revenues, profitability, and cash flows and had a material adverse impact on our financial condition, results of operations, and cash flows.
+Added: While all our properties are currently open, there remains continuing logistical challenges faced by the entire gaming industry resulting from COVID-19-related labor shortages and supply chain disruptions.
+Added: Future disruptions, as well as significant negative economic trends, due to the COVID-19 pandemic or other widespread illnesses or epidemics, may adversely impact our business, prospects, financial condition, and results of operations.
Intense competition exists in the gaming, media, and entertainment industries, and we expect competition to continue to intensify.
The gaming, media, and entertainment industries are characterized by an increasingly high degree of competition among a large number of participants.
−Removed: In a broad sense, both our retail and interactive gaming operations face competition from all manner of leisure and entertainment activities, including shopping, athletic events, television and movies, concerts and travel.
−Removed: It is possible that these secondary competitors could reduce the number of visitors to our facilities or the amount they are willing to wager with us, which could have a material adverse effect on our ability to generate revenue or maintain our profitability and cash flows.
−Removed: Legalized gaming is currently permitted in various forms throughout countries we operate in (U.S.
−Removed: and Canada.) Other jurisdictions, including states adjacent to those in which we currently have properties, have recently legalized, implemented, and/or expanded gaming.
−Removed: Competition from gaming options such as state and province-sponsored internet lotteries, sweepstakes, charitable gaming, video gaming terminals at bars, restaurants, taverns and truck stops, illegal slot machines and skill games, fantasy sports and third-party internet or mobile-based gaming platforms, including both legal and illegal online gaming and sports betting operations, could divert customers from our properties and our online gaming and sports betting offerings and thus adversely affect our financial condition, results of operations, and cash flows.
−Removed: In addition, our properties compete with numerous casinos and hotel casinos of varying quality and size in market areas where they are located, including on various lands taken into trust for the benefit of certain Native American tribes.
−Removed: In most markets, we compete directly with other casino facilities operating in the immediate and surrounding market areas.
−Removed: In some markets, we face competition from nearby markets in addition to direct competition within our market areas.
+Added: We compete with a variety of gaming operations, including casinos and hotel casinos of varying quality and size and other gaming options such as state and province-sponsored internet lotteries, sweepstakes, charitable gaming, video gaming terminals at bars, restaurants, taverns and truck stops, illegal slot machines and skill games, fantasy sports and third-party internet or mobile-based gaming platforms, including both legal and illegal iCasino and sports betting operations.
+Added: More generally, both our retail and interactive gaming operations face competition from all manner of leisure and entertainment activities, including shopping, athletic events, television and movies, concerts, and travel.
We and our competitors have invested in expanding existing facilities, developing new facilities, and acquiring established facilities in existing markets.
This expansion of existing casino entertainment properties, the increase in the number of properties and aggressive marketing strategies by many of our competitors have increased competition in many markets in which we compete, and this intense competition can be expected to continue.
−Removed: As competing properties and new markets open, our results of operations may be negatively impacted.
−Removed: Increased competition may require us to make substantial capital expenditures to maintain and enhance the competitive positions of our properties, including making expenditures to increase the attractiveness and add to the appeal of our facilities, including increasing the manner and frequency in which we refresh, refurbish or replace fixtures and equipment at our properties.
−Removed: After satisfying our obligations under our outstanding indebtedness, there can be no assurance that we will have sufficient funds to undertake these expenditures or that we will be able to obtain sufficient financing to fund such expenditures.
+Added: As competing properties and new markets open, our business, prospects, financial condition, and results of operations may be negatively impacted.
+Added: Increased competition may require us to make substantial capital expenditures to maintain and enhance the competitive positions of our properties, including making expenditures to increase the attractiveness and add to the appeal of our facilities, increasing the manner and frequency in which we refresh, refurbish or replace fixtures, equipment and gaming offerings.
+Added: After satisfying our obligations under our outstanding indebtedness and Triple Net Leases (as defined below), there can be no assurance that we will have sufficient funds to undertake these expenditures or that we will be able to obtain sufficient financing to fund such expenditures.
If we are unable to make such expenditures, our competitive position could be materially adversely affected.
−Removed: Similarly, there is intense competition among online gaming and sports betting providers.
−Removed: A number of established, well-financed companies producing sports betting and online gaming and/or interactive entertainment products and services compete with our offerings, and other well-capitalized companies may introduce competitive services.
+Added: Similarly, there is intense competition among iCasino and online sports betting providers.
Such competitors may spend more money and time on developing and testing products and services, undertake more extensive marketing campaigns, adopt more aggressive pricing or promotional policies or otherwise develop more commercially successful products or services than ours, which could negatively impact our business.
There has also been considerable consolidation among competitors in the interactive gaming sectors and such consolidation and future consolidation could result in the formation of larger competitors with increased financial resources and altered cost structures, which may enable them to offer more competitive products, gain a larger market share, expand offerings, and broaden their geographic scope of operations.
−Removed: If we are not able to maintain or improve our market share, or if our offerings do not continue to be popular, our business could suffer.
+Added: If we are not able to maintain or improve our market share, or if our offerings do not continue to be popular, our Interactive segment’s business, prospects, financial condition, and results of operations could suffer.
Our results of operations may fluctuate due to seasonality and other factors and, therefore, our periodic operating results will not be guarantees of future performance.
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We maintain significant property insurance, including business interruption coverage, for these types of casualty events;
−Removed: however, if any such events occur, there can be no assurances that we will be fully or promptly compensated, if at all, for losses at any of our properties in the event of future inclement weather or casualty events or from the closings of our properties due to widespread illnesses or epidemics, including COVID-19.
−Removed: In addition, the occurrence of such an event may adversely impact general economic or other conditions in the areas in which our properties are located or from which they draw their patrons, and our business, financial condition and results of operations could be materially adversely affected.
−Removed: Negative events or negative media coverage including relating to, or a declining popularity of, online gaming, sports betting, or the underlying sports, teams or athletes and related talent, may adversely impact our reputation, which could have an adverse impact on our business.
−Removed: Public opinion can significantly influence our business.
−Removed: Unfavorable publicity regarding us or regarding the actions of third parties with whom we have relationships or the underlying sports (including declining popularity of the sports or athletes) could seriously harm our reputation.
−Removed: In addition, a negative shift in the perception of sports betting and online gaming by the public or by politicians, lobbyists or others could affect future legislation of sports betting and online gaming.
−Removed: Negative public perception could also lead to new restrictions on or to the prohibition of online gaming or sports betting in jurisdictions in which we currently operate.
−Removed: Such negative publicity could also adversely affect:
−Removed: (i) the size, demographics, engagement, and loyalty of our customer base and result in decreased revenue or slower user growth rates;
−Removed: (ii) our ability to retain and attract team members;
−Removed: and (iii) investor perception, all of which could seriously harm our business.
−Removed: Our acquisition of Barstool may result in potential adverse reactions, negative publicity or changes to our business, regulatory or other stakeholder relationships.
−Removed: Our relationships with gaming regulatory authorities, stakeholders and business partners could be adversely affected as a result of our affiliation with Barstool Sports and the individuals, influencers, and/or media personalities connected with Barstool Sports.
−Removed: In addition, our business partners or stakeholders may react negatively to actual or perceived competitive threats from our affiliation with the individuals, influencers, and/or media personalities connected with Barstool.
−Removed: Our projections are subject to significant risks, assumptions, estimates and uncertainties, including assumptions regarding future legislation and changes in regulations, both inside and outside of the United States.
−Removed: As a result, our projected revenues and profitability may differ materially from our expectations.
−Removed: We operate in rapidly changing and competitive industries and our projections are subject to the risks and assumptions made by management with respect to our industries.
−Removed: Operating results are difficult to forecast because they can depend, in part, on new or amended legislation and regulations by different states and provinces, the adoption of which is uncertain.
−Removed: Furthermore, if we invest in the development of new products or distribution channels, such as our expanded media business and non-gaming retail entertainment, that do not achieve significant commercial success or deliver projected results, whether
−Removed: because of competition or otherwise, we may not recover the often substantial “up front” costs of developing and marketing those products and distribution channels, or recover the opportunity cost of diverting management and financial resources away from other products or distribution channels.
−Removed: Supply chain delays could impose additional costs on us.
−Removed: Supply chain delays or disruptions could impact our ability to obtain gaming equipment, semiconductor chips and other supplies for our business from our key suppliers on acceptable terms or at all.
−Removed: Any suspension or delay in our suppliers’ ability to provide us adequate equipment or supplies, or in our ability to procure equipment or supplies from other sources in a timely manner or at all, could impair our ability to meet customer demand and therefore could have a material adverse effect on our business, financial condition or results of operations.
−Removed: Our business and operations have been, and may in the future, be adversely affected by epidemics, pandemics, outbreaks of disease, and other adverse public health developments, including COVID-19.
−Removed: The closing of our properties due to the COVID-19 pandemic caused significant disruptions to our ability to generate revenues, profitability, and cash flows and had a material adverse impact on our financial condition, results of operations, and cash flows.
−Removed: While all our properties are currently open, there remains continuing logistical challenges faced by the entire gaming industry resulting from COVID-19-related labor shortages and supply chain disruptions.
−Removed: Future disruptions, as well as significant negative economic trends, due to the COVID-19 pandemic or other widespread illnesses or epidemics, may adversely affect our stock price.
−Removed: Epidemics, pandemics, outbreaks of novel diseases, and other adverse public health developments in states where we operate may arise at any time.
−Removed: Such developments, including the COVID-19 pandemic, have had, and in the future may have, an adverse effect on our business, financial condition and results of operations.
−Removed: These effects include a potentially negative impact on the availability of our key personnel, labor shortages and increased turnover, temporary closures of our properties or the facilities of our business partners, customers, suppliers, third-party service providers or other vendors, and interruption of domestic and global supply chains, distribution channels and liquidity and capital or financial markets.
−Removed: In particular, restrictions on or disruptions of transportation may significantly adversely impact our business.
−Removed: The impact of a widespread illnesses or epidemics, including COVID-19, may also have the effect of exacerbating many of the other risks described in this Annual Report on Form 10-K.
+Added: however, if any such events occur, there can be no assurances that we will be fully or promptly compensated, if at all, for losses at any of our properties in the event of future inclement weather or casualty events
+Added: or from the closings of our properties due to widespread illnesses or epidemics.
+Added: In addition, the occurrence of such an event may adversely impact general economic or other conditions in the areas in which our properties are located or from which they draw their patrons, and our business, prospects, financial condition, and results of operations could be materially adversely affected.
+Added: Shareholder activists could cause a disruption to our business.
+Added: An activist investor has indicated disagreement with our strategic direction and capital allocation policies and may seek representation on our Board of Directors.
+Added: Our business, operating results and financial condition could be adversely affected and may result in, among other things:
+Added: (a) increased operating costs, including increased legal expenses, insurance, administrative expenses and associated costs incurred in connection with director election contests;
+Added: (b) uncertainties as to our future direction, which could result in the loss of potential business opportunities and could make it more difficult to attract, retain, or motivate qualified personnel, and strain relationships with investors and customers;
+Added: and (c) reduction or delay in our ability to effectively execute our current business strategy and to implement new strategies.
Risks Related to our Operations
−Removed: We have certain retail properties that generate a significant percentage of our revenues and our ability to meet our operating and debt service requirements is dependent, in part, upon the continued success of these properties.
+Added: We generate a material percentage of our revenues from certain geographic regions and our ability to meet our operating and debt service requirements is dependent, in part, upon the continued success of these regions.
For the year ended December 31, 2023, we generated 13.8%, 13.6%, and 9.7% of our revenues from our retail properties within the states of Louisiana, Ohio, and Missouri, respectively.
−Removed: Additionally, we generated 5.6% of our revenues from our property in Charles Town, West Virginia.
−Removed: Therefore, our results will be dependent on the regional economies and competitive landscapes at these properties.
−Removed: Likewise, our ability to meet our operating and debt service requirements is dependent, in part, upon the continued success of these properties.
−Removed: We are required to utilize a significant portion of our cash flow from operations to make our rent payments under our Triple Net Leases, which could adversely affect our ability to fund our operations and growth and limit our ability to react to competitive and economic changes.
−Removed: We are required to utilize a significant portion of our cash flow from operations to make our rent payments, which were $925.0 million for the year ended December 31, 2022, pursuant to and subject to the terms and conditions of our Master Leases, Meadows Lease, Perryville Lease, Tropicana Lease, which was terminated on September 26, 2022, and Morgantown Lease each with GLPI, and our Margaritaville Lease and Greektown Lease with VICI (as defined previously, collectively, our “Triple Net Leases”).
+Added: As a result, we are subject to a greater degree of risk than a gaming company with more regional diversification as our results will be dependent on the regional economies and competitive landscapes in these specific markets.
+Added: Our ability to meet our operating and debt service requirements is thus dependent, in part, upon the continued success of our properties in these key regions.
+Added: The risks to which we have a greater degree of exposure include changes in local economic and competitive conditions;
+Added: changes in local and state governmental laws and regulations, including gaming laws and regulations, and the way in which those laws and regulations are applied;
+Added: natural and other disasters, including the potential effects of climate change such as severe storms, hurricanes, typhoons, rising sea levels, severe drought, or the outbreak of infectious diseases;
+Added: an increase in the cost of maintaining our properties in these areas;
+Added: a decline in the number of visitors to locations in such regions;
+Added: and a decrease in gaming and non-gaming activities at our properties in such regions.
+Added: Any of these factors could negatively affect our business, prospects, financial condition, results of operations, and ability to generate sufficient cash flow to meet our operating and debt service requirements.
+Added: A significant portion of our cash flow from operations is used to make interest payments and rent payments under our debt and lease agreements.
+Added: As of December 31, 2023, we had indebtedness of $2.8 billion, including $1.5 billion outstanding under our Amended Credit Facilities.
+Added: We are also required to utilize a significant portion of our cash flow from operations to make our rent payments, which were $937.8 million for the year ended December 31, 2023, pursuant to and subject to the terms and conditions of our Master Leases and Morgantown Lease, each with GLPI, and our Margaritaville Lease and Greektown Lease with VICI (as defined previously, collectively, our “Triple Net Leases”).
As a result of these commitments under our Triple Net Leases, our ability to fund our own operations or development projects, raise capital, make acquisitions and otherwise respond to competitive and economic changes may be adversely affected.
Further, our obligations under the Triple Net Leases may make it more difficult for us to satisfy our obligations with respect to our indebtedness and to obtain additional indebtedness and restrict our ability to raise capital, make acquisitions, divestitures, and engage in other significant transactions.
−Removed: Any of the aforementioned factors could have a material adverse effect on our financial condition, results of operations, and cash flows.
+Added: Any of the aforementioned factors could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
+Added: There is no assurance that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our Amended Credit Facilities in amounts sufficient to enable us to fund our liquidity needs, including with respect to our indebtedness and rent payments.
+Added: Our variable rate borrowings expose us to interest rate volatility, which could cause our debt service obligations to increase significantly.
+Added: We also may incur indebtedness related to properties we develop or acquire in the future prior to generating cash flow from those properties.
+Added: If those properties do not provide us with cash flow to service that indebtedness, we will need to rely on cash flow from our other properties, which would increase our leverage.
+Added: In addition, if we consummate significant acquisitions in the future, our cash requirements may increase significantly.
+Added: We may require additional capital to support our growth plans, and such capital may not be available on terms acceptable to us, if at all.
+Added: We may finance some of our current and future expansion, development and renovation projects and acquisitions with cash flow from operations, borrowings under our Amended Credit Facilities and equity or debt financings.
+Added: For more information regarding our future development projects, see “Recent Acquisitions, Development Projects and Other” in the “ Executive Overview ” within our Management’s Discussion and Analysis.
+Added: If we are unable to finance our current or future projects, we could have to seek alternative financing.
+Added: Depending on credit market conditions, including the current high interest rate environment, alternative sources of funds may not be sufficient to finance our expansion, development and/or renovation, or such other financing may not be available on acceptable terms, in a timely manner or at all.
+Added: In addition, our existing indebtedness contains restrictions on our ability to incur additional indebtedness.
+Added: If we are unable to secure additional financing, we could be forced to limit or suspend expansion, development and renovation projects and acquisitions, which may adversely affect our business, prospects, financial condition, results of operations, and cash flows.
+Added: The capacity under our Amended Revolving Credit Facility is $1.0 billion, of which $978.3 million is available as of December 31, 2023.
+Added: Our Amended Revolving Credit Facility expires in 2027.
+Added: There is no certainty that our lenders will continue to remain solvent or fund their respective obligations under our Amended Credit Facilities.
+Added: Events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
+Added: Although we assess our banking and customer relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial services industry or economy in general.
Most of our facilities are leased and could experience risks associated with leased property.
We lease 36 of the facilities we operate pursuant to the Triple Net Leases.
−Removed: Termination of the PENN Master Lease, Pinnacle Master Lease, or Morgantown Lease could result in a default under our debt agreements and could have a material adverse effect on our financial condition, results of operations, and cash flows.
+Added: Termination of the PENN Master Lease, the 2023 Master Lease, Pinnacle Master Lease, or Morgantown Lease could result in a default under our debt agreements and could have a material adverse effect on our financial condition, results of operations, and cash flows.
Moreover, as a lessee, we do not completely control the land and improvements underlying our operations, and our landlords under the Triple Net Leases could take certain actions to disrupt our rights in the facilities leased under the Triple Net Leases that are beyond our control.
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Further, there can also be no assurance that we will be able to comply with our obligations under the Triple Net Leases in the future or that our landlords will be able to comply with their obligations under the Triple Net Leases with us.
−Removed: Our operations could be disrupted if management agreements and/or leases with third parties and local governments are not renewed.
+Added: We are subject to risks and costs related to climate change regulations and greenhouse gas effects.
+Added: There is a growing consensus that greenhouse gas (“GHG”) emissions continue to alter the composition of the global atmosphere in ways that are affecting, and are expected to continue affecting, the global climate.
+Added: We may become subject to legislation and regulation regarding climate change, and compliance with any new rules could be difficult, burdensome, and costly.
+Added: Concerned parties, such as legislators and regulators, stockholders, and nongovernmental organizations, as well as companies in many business sectors, are considering ways to reduce GHG emissions.
+Added: Many states have announced or adopted programs to stabilize and reduce GHG emissions and, in the past, federal legislation has been proposed in Congress.
+Added: If such legislation is enacted, we could incur increased energy, environmental and other costs, and capital expenditures to comply with the limitations.
+Added: Unless and until legislation is enacted and its terms are known, we cannot reasonably or reliably estimate its impact on our business, financial condition, results of operations, or ability to compete.
+Added: Further, regulation of GHG emissions may limit our customers’ ability to travel to our properties (e.g.
+Added: as a result of increased fuel costs or restrictions on transport-related emissions).
+Added: Investors’ and other stakeholders’ expectations of our performance relating to environmental, social, and governance factors may impose additional costs and expose us to new risks.
+Added: There is an increasing focus from certain investors, customers, partners, employees, other stakeholders, governments, and regulators concerning environmental, social, and governance matters (“ESG”).
+Added: For example, various policymakers, such as the SEC and the State of California, have adopted, or are considering adopting rules or laws to require companies to provide significantly expanded climate-related disclosures, which may require us to incur significant additional costs to comply, including the implementation of significant additional internal controls processes and procedures regarding matters that have not been subject to such controls in the past, and impose increased oversight obligations on our management and board of directors.
+Added: Additionally, some investors may use these non-financial performance factors to guide their investment strategies
+Added: and, in some cases, may choose not to invest in us if they believe our policies and actions relating to ESG are inadequate.
+Added: We may face reputational damage in the event that we do not meet the ESG standards set by various constituencies.
+Added: As ESG best practices and reporting standards continue to develop, we may incur increasing costs related to ESG monitoring and reporting and compliance with ESG initiatives.
+Added: We publish an annual Corporate Social Responsibility Report, which highlights, among other things, our climate change mitigation activities and how we are supporting our workforce, including our diversity, equity, inclusion, and belonging efforts.
+Added: Our disclosures on these matters, or a failure to meet evolving stakeholder expectations for ESG practices and reporting, may potentially harm our reputation and customer relationships.
+Added: Furthermore, if our competitors’ ESG performance is perceived to be better than ours, potential or current investors may elect to invest with our competitors instead.
+Added: In addition, in the event that we communicate certain initiatives or goals regarding ESG matters, we could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could be criticized for the scope of such initiatives or goals.
+Added: If we fail to satisfy the expectations of investors, customers, employees, and other stakeholders, or our initiatives are not executed as planned, our business, financial condition, results of operations, and prospects could be adversely affected.
+Added: Our management agreements and/or leases with third parties and local governments may not be renewed or the terms of a renewal may require significant fees or capital expenditure commitments.
Our operations in several jurisdictions depend on land leases and/or management and development agreements with third parties and local governments.
−Removed: If we, or if GLPI or VICI in the case of leases pursuant to which we are the sub-lessee, are unable to renew these leases and agreements on satisfactory terms as they expire or if disputes arise regarding the terms of these agreements, our business may be disrupted and, in the event of disruptions in multiple jurisdictions, could have a material adverse effect on our financial condition, results of operations, and cash flows.
−Removed: There can be no assurance that we will be able to compete effectively or generate sufficient returns on our recently expanded sports betting and online gaming operations, including our acquisitions of Barstool and theScore.
+Added: If we, or if GLPI or VICI, in the case of leases pursuant to which we are the sub-lessee, are unable to renew these leases and agreements on satisfactory terms as they expire or if disputes arise regarding the terms of these agreements, our business may be disrupted and, in the event of disruptions in multiple jurisdictions, could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
+Added: We may also be required to pay higher fees and/or incur additional capital expenditures to renew management agreements with third parties and local governments in our existing jurisdictions, or incur higher fees and/or capital expenditures than forecasted in connection with new management agreements with third parties and local governments as we expand into new jurisdictions.
+Added: There can be no assurance that we will be able to compete effectively or generate sufficient returns on our recently expanded sports betting and iCasino operations, including the launch of ESPN BET.
Certain of the jurisdictions in which we operate have legalized intra-state sports wagering and have established extensive state licensing and regulatory requirements governing any such intra-state sports wagering.
−Removed: As of December 31, 2022, we have launched the Barstool Sportsbook app in 14 states and theScore Bet app in Ontario, and we expect to launch our Barstool Sportsbook app in additional states throughout 2023.
−Removed: Our sports betting and online gaming operations compete, and will continue to compete, in a rapidly evolving and highly competitive market against an increasing number of competitors.
−Removed: Additionally, and as described in more detail below, we have entered into agreements with other sports betting and online gaming operators and may enter into additional agreements with strategic partners and other third-party vendors to provide market access in certain jurisdictions.
−Removed: In addition, there can be no assurance that the Barstool and theScore audiences will engage in sports betting and online gaming products to the extent that we expect.
−Removed: Further, the success of our proposed sports betting and online gaming operations is dependent on a number of additional factors, many of which are beyond our control, including the ultimate tax rates and license fees charged by jurisdictions across the United States and Canada;
+Added: As of December 31, 2023, we have launched the ESPN BET app in 17 states, and we expect to launch our ESPN BET app in additional states throughout 2024.
+Added: Our sports betting and iCasino operations compete, and will continue to compete, in a rapidly evolving and highly competitive market against an increasing number of competitors.
+Added: Additionally, and as described in more detail below, we have entered into agreements with other online sports betting and iCasino operators and may enter into additional agreements with strategic partners and other third-party vendors to provide market access in certain jurisdictions.
+Added: In addition, there can be no assurance that the ESPN BET audience will engage in sports betting and iCasino products to the extent that we expect.
+Added: Further, the success of our proposed sports betting and iCasino operations is dependent on a number of additional factors, many of which are beyond our control, including the ultimate tax rates and license fees charged by jurisdictions across the United States and Canada;
our ability to gain market share in a new market;
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There can be no assurance that we will be able to compete effectively or that our expansion will be successful and generate sufficient returns on our investment.
−Removed: Any of the factors above could prevent us from receiving the expected returns of our acquisitions of Barstool and theScore, cause the market price of our common stock to decline, and have a material adverse effect on our financial condition, results of operations and cash flows.
Our operations and their success are largely dependent on the skill and experience of management and key personnel.
−Removed: Our success and our competitive position, including as relates to our retail operations, sports betting and online gaming operations, and media businesses, are largely dependent upon, among other things, the efforts and skills of our senior executives and management team.
+Added: Our success and our competitive position, related to our retail operations, sports betting and iCasino operations, and media businesses, are largely dependent upon, among other things, the efforts and skills of our senior executives and management team.
Although we enter into employment agreements with certain of our senior executives and key personnel, we cannot assure you that we will be able to retain our existing senior executive and management personnel or attract additional qualified senior executive and management personnel.
−Removed: Our business could suffer if we cannot attract and retain talented team members.
+Added: Our business is dependent on our ability to attract and retain talented team members.
We compete with other companies both within and outside of our industry for talented personnel.
−Removed: If we cannot recruit, train, develop, and retain skilled and experienced personnel to our corporate, retail operations, sports betting and online gaming, and media businesses, we could experience increased employee turnover, decreased guest or user satisfaction, low morale, inefficiency, or internal control failures.
−Removed: Insufficient numbers of talented team members could also limit our ability to grow and
−Removed: expand our businesses.
+Added: If we cannot recruit, train, develop, and retain skilled and experienced personnel to our corporate, retail operations, sports betting and iCasino, and media businesses, we could experience increased employee turnover, decreased guest or user satisfaction, low morale, inefficiency, or internal control failures.
+Added: Insufficient numbers of talented team members could also limit our ability to grow and expand our businesses.
A shortage of frontline and skilled labor could also result in higher wages that would increase our labor costs, which could reduce our profits.
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Our ability to attract, retain, and motivate employees, influencers and media personalities may also be adversely affected by stock price volatility.
−Removed: Collective bargaining activity and strikes could disrupt our operations, increase our labor costs, and interfere with the ability of our management to focus on executing our business strategies.
−Removed: A significant number of team members at our properties are currently covered by collective bargaining agreements.
+Added: We face risks related to collective bargaining activity and strikes.
+Added: As of December 31, 2023, approximately 25% of team members at our properties are currently covered by collective bargaining agreements.
Numerous collective bargaining agreements are typically subject to negotiation each year, and our ability in the past to resolve such negotiations does not mean that we will be able to resolve future negotiations without strikes, disruptions, or on terms that we consider reasonable.
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Labor disputes and disruptions have in the past, and could in the future, result in adverse publicity and negatively affect operations and revenues at affected properties.
−Removed: In addition, labor disputes and disruptions could harm our relationship with our team members, result in increased regulatory inquiries and enforcement by governmental authorities, harm our relationships with our guests and customers, divert management attention, and reduce customer demand for our services, all of which could have an adverse effect on our reputation, business, financial condition, or results of operations.
In addition, labor regulation and the negotiation of new or existing collective bargaining agreements could lead to higher wage and benefit costs, changes in work rules that raise operating expenses and legal costs, and could impose limitations on our ability or the ability of our third-party property owners to take cost saving measures during economic downturns.
Given the large number of employees, labor unions are making a concerted effort to recruit more employees in the gaming industry, and we have experienced attempts by labor organizations to organize certain of our non-union employees.
−Removed: These efforts have achieved some success to date.
We cannot provide any assurance that we will not experience additional and successful union activity in the future.
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Increased unionization of our workforce, new labor legislation or changes in regulations could disrupt our operations, reduce our profitability or interfere with the ability of our management to focus on executing our business strategies.
−Removed: If we fail to detect fraud or theft, including by our users and employees, our reputation may suffer which could harm our brand and reputation and negatively impact our business, financial condition and results of operations and can subject us to investigations and litigation.
−Removed: We have in the past incurred, and may in the future incur, losses from various types of financial fraud, including use of stolen or fraudulent payment card or payment instrument data, claims of unauthorized payments by a user and attempted payments by users with insufficient funds.
−Removed: Bad actors use increasingly sophisticated methods to engage in illegal activities involving personal information, such as unauthorized use of another person’s identity, account information or payment information and unauthorized acquisition or use of credit or debit card details, bank account information and mobile phone numbers and accounts.
−Removed: Under current payment industry practices, we may be liable for use of funds on our products with fraudulent payment instrument data, even if the associated financial institution approved the payment transaction.
−Removed: Acts of fraud may involve various tactics, including collusion.
−Removed: Successful exploitation of our systems could have negative effects on our product offerings, services and user experience and could harm our reputation.
−Removed: Failure to discover such acts or schemes in a timely manner could result in harm to our operations.
−Removed: In addition, negative publicity related to such schemes could have an adverse effect on our reputation, potentially causing a material adverse effect on our business, financial condition, results of operations and prospects.
−Removed: In the event of the occurrence of any such issues with our existing technology or product offerings, substantial engineering and marketing resources and management attention may be diverted from other projects to correct these issues, which may delay other projects and the achievement of our strategic objectives.
−Removed: In addition, any misappropriation of, or unauthorized access to, proprietary information owned or licensed by us or our users or other breach of our information security could result in legal claims or legal proceedings, including regulatory investigations and actions, or liability for failure to comply with privacy and information security laws, including for failure to protect personal information or for misusing personal information, which could disrupt our operations, force us to modify our
−Removed: business practices, damage our reputation and expose us to claims from our users, regulators, employees and other persons, any of which could have an adverse effect on our business, financial condition, results of operations and prospects.
−Removed: Despite measures we have taken to detect and reduce the occurrence of fraudulent or other malicious activity on our offerings, we cannot guarantee that any of our measures will be effective or will scale efficiently with our business or as new methods of engaging in fraudulent activity occur.
−Removed: Our failure to adequately detect or prevent fraudulent transactions could harm our reputation or brand, result in litigation or regulatory action and lead to expenses that could adversely affect our business, financial condition and results of operations.
+Added: We face the risk of fraud, theft, and cheating.
+Added: We face the risk that gaming customers may attempt or commit fraud or theft or cheat in order to increase winnings.
+Added: Such acts of fraud, theft, or cheating could involve the use of counterfeit chips or other tactics, possibly in collusion with our employees.
+Added: Internal acts of cheating could also be conducted by employees through collusion with dealers, surveillance staff, floor managers, or other casino or gaming area staff.
+Added: Additionally, we also face the risk that customers may attempt or commit fraud or theft with respect to our non-gaming offerings or against other customers.
+Added: Such risks include stolen credit or charge cards or cash, falsified checks, theft of retail inventory and purchased goods, and unpaid or counterfeit receipts.
+Added: Failure to discover such acts or schemes in a timely manner may result in losses in our operations.
+Added: In the event of the occurrence of any such issues with our existing technology or product offerings, substantial resources and management attention may be diverted from other projects to correct these issues, which may delay other projects and the achievement of our strategic objectives.
+Added: Negative publicity related to such acts or schemes could have an adverse effect on our reputation, potentially causing a material adverse effect on our business, financial condition, results of operations, and cash flows.
We rely on, among other things, copyrights, trademarks, trade secrets, confidentiality procedures, and contractual provisions to protect our intellectual property rights and we may be unable to protect or may not be successful in protecting our intellectual property rights.
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We rely on, among other things, copyrights, trademarks, trade secrets, confidentiality procedures, and contractual provisions to protect our proprietary rights.
−Removed: While we enter license, confidentiality and non-disclosure agreements with our employees and vendors, consultants, users, potential users and others to attempt to limit access to and distribution of proprietary and confidential information, it is possible that:
+Added: While we enter license, confidentiality and non-disclosure agreements with our
+Added: employees and vendors, consultants, users, potential users, and others to attempt to limit access to and distribution of proprietary and confidential information, it is possible that:
• some or all of our confidentiality and non-disclosure agreements will not be honored;
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Inability to protect our intellectual property rights could have a material adverse effect on our prospects, business, financial condition or results of operations.
−Removed: Our commercial success depends upon us avoiding the infringement of intellectual property rights owned by others and any such infringements, including those that are inadvertent, may have a material adverse effect on our business.
+Added: Our commercial success depends upon us avoiding the infringement of intellectual property rights owned by others.
The industries in which we compete have many participants that own, or claim to own, intellectual property, including participants that have been issued patents and may have filed patent applications or may obtain additional patents and proprietary rights for technologies similar to those used by us in our products.
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If we do not obtain such a license, our prospects, business, operating results, and financial condition could be materially adversely affected, and we could be required to cease related business operations in some markets and restructure our business to focus on continuing operations in other markets.
−Removed: Our technology contains third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could restrict our ability to provide our offerings.
+Added: Our technology contains third-party open source software components.
Our technology contains software modules licensed to us under “open source” licenses from third-party sources.
−Removed: Use and distribution of open source software may entail greater risks than use of third-party commercial or proprietary software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code.
+Added: Use and distribution of open source software may entail greater risks than use of third-party commercial or proprietary software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding
+Added: infringement claims or the quality of the code.
In addition, the public availability of such software may make it easier for others to compromise our technology.
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We may face disruption and other difficulties in integrating and managing acquired operations or other initiatives we have recently acquired, may develop, or may acquire in the future.
−Removed: We could face significant challenges in managing and integrating our expanded or combined operations and any other properties or operations we may develop or acquire, particularly in new competitive markets or business lines, including our recent acquisitions of theScore and the remaining outstanding equity of Barstool.
−Removed: The integration and management of more significant operations that we develop or acquire, such as our ability to (i) integrate the Barstool Sportsbook into theScore’s mobile app in the U.S.
−Removed: and (ii) migrate the Barstool Sportsbook to theScore’s player account management and trading platforms, will require the dedication of management resources that may temporarily divert attention from our day-to-day business.
+Added: We could face significant challenges in managing and integrating our expanded or combined operations and any other properties or operations we may develop or acquire, particularly in new competitive markets or business lines, including our recently launched ESPN BET sportsbook app.
+Added: The integration and management of more significant operations that we develop or acquire, such as our recent launch of the ESPN BET sportsbook app may temporarily divert attention from our day-to-day business.
In addition, development and integration of new information technology systems that may be required is costly and time-consuming.
The process of integrating operations that we may acquire also could interrupt the activities of those businesses, which could have a material adverse effect on our financial condition, results of operations, and cash flows.
−Removed: In addition, the development of new operations may involve regulatory, legal and competitive risks, and, as it relates to property
−Removed: acquisitions, construction and local opposition risks, as well as the risks attendant to partnership deals on these development opportunities.
−Removed: In particular, local opposition can delay or increase the anticipated cost of a project, and, in projects where we team up with a joint venture partner, if we cannot reach agreement with such partners, or if our relationships otherwise deteriorate, we could face significant increased costs and delays.
+Added: In addition, the development of new operations may involve regulatory, legal, and competitive risks, and, as it relates to property acquisitions, construction, and local opposition risks, as well as the risks attendant to partnership deals on these development opportunities.
+Added: In particular, local opposition can delay or increase the anticipated cost of a project, and, in projects where we team up with a joint venture partner or licensing partner, if we cannot reach agreement with such partners, or if our relationships otherwise deteriorate, we could face significant increased costs and delays.
Finally, given the competitive nature of these types of limited license opportunities, litigation is possible.
−Removed: We cannot assure you that we will be able to manage the combined operations effectively or realize any of the anticipated benefits of our acquisitions or development projects.
+Added: We cannot assure you that we will be able to manage the combined operations that we develop or acquire effectively or realize any of the anticipated benefits of our acquisitions or development projects.
We also cannot assure you that if acquisitions are completed, that the acquired businesses will generate returns consistent with our expectations.
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The occurrence of some or all of the above-described events could have a material adverse effect on our financial condition, results of operations, and cash flows.
−Removed: We lease facilities that are located in areas that experience extreme weather conditions.
+Added: We lease facilities that are located in areas that experience extreme weather conditions, which may increase in frequency and severity as a result of climate change.
+Added: We have been and may continue to be adversely impacted by increases in the frequency, duration, and severity of extreme weather events and changes in precipitation and temperature which may be increasing consequences of climate change.
Extreme weather conditions may interrupt our operations and reduce the number of customers who visit our facilities in the affected areas.
−Removed: Our properties in Illinois, Iowa, Kansas, Louisiana, Missouri, Ohio, Colorado, Indiana and Pennsylvania are at risk of experiencing snowstorms, tornadoes and/or flooding.
−Removed: In the past, adverse weather conditions have interrupted our operations, damaged property and reduced the number of customers who visit our facilities in an affected area.
+Added: Our properties in Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Massachusetts, Mississippi, Missouri, Ohio, and Pennsylvania are at risk of experiencing extreme weather conditions, including snowstorms, tornadoes, hurricanes and/or flooding.
+Added: In the past, adverse weather conditions, potentially exacerbated by climate change, have interrupted our operations, damaged property, and reduced the number of customers who visit our facilities in an affected area.
For example, we have experienced interrupted operations and property damage due to hurricanes in the areas around the Gulf of Mexico and due to certain snowstorms in the Midwest and Northeast.
If any of our properties are damaged or there is a prolonged disruption at any of our properties due to natural disasters or other catastrophic weather events, our business, results of operations, and financial condition could be materially adversely affected.
−Removed: Additionally, our retail casino gaming, sports betting and online gaming operations rely heavily on technology services and an uninterrupted supply of electrical power.
−Removed: Any unscheduled disruption in our technology services or interruption in the supply of electrical power as a result of extreme weather, or otherwise, could result in an immediate, and possibly substantial, loss of revenues due to a shutdown of our retail casino gaming (including slot machines and security systems), sports betting and online gaming operations.
−Removed: We rely on third-party payment processors to process deposits and withdrawals made by our online sports betting and iCasino users, and if we cannot manage our relationships with such third parties and other payment-related risks, our business, financial condition and results of operations could be adversely affected.
−Removed: We rely on a limited number of third-party payment processors to process deposits and withdrawals made by our users.
−Removed: If any of our third-party payment processors terminate their relationship with us or refuse to renew their agreements with us on commercially reasonable terms, we would need to find alternate payment processors, and may not be able to secure similar terms or replace such payment processor in an acceptable time frame.
−Removed: Further, the software and services provided by our third-party payment processors may not meet our expectations, contain errors or vulnerabilities, be compromised or experience outages.
−Removed: Any of these risks could cause us to lose our ability to accept online payments or other payment transactions or make timely payments to our users, any of which could make our technology less trustworthy and convenient and adversely affect our ability to attract and retain our users.
−Removed: A majority of user deposits are made with payment cards or through other third-party payment services, which subjects us to certain regulations and to the risk of fraud.
−Removed: We may in the future offer new payment options to users that may be subject to additional regulations and risks.
−Removed: We are also subject to a number of other laws and regulations relating to the payments we accept from our users, including with respect to money laundering, money transfers, privacy and information security.
−Removed: If we fail to comply with applicable rules and regulations, we may be subject to civil or criminal penalties, fines and/or higher transaction fees and may lose our ability to accept online payments or other payment card transactions, which could make our offerings less convenient and attractive to our users.
−Removed: If any of these events were to occur, our business, financial condition and results of operations could be adversely affected.
−Removed: Additionally, our payment processors require us to comply with payment card network and sponsoring bank operating rules, which are set and interpreted by the payment card networks and sponsoring banks.
−Removed: The payment card networks and/or
−Removed: sponsoring banks could adopt new operating rules or interpret or reinterpret existing rules in ways that might prohibit us from providing certain offerings to some users, be costly to implement or difficult to follow.
−Removed: We have agreed to reimburse our payment processors and sponsoring banks for fines they are assessed by payment card networks if we or our users violate these rules.
−Removed: Any of the foregoing risks could adversely affect our business, financial condition and results of operations.
−Removed: If our third-party mobile application distribution platforms or service providers do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition, and results of operations could be adversely affected.
−Removed: Our success depends in part on our relationships with other third-party service providers.
−Removed: We rely upon third-party distribution platforms, including the Apple App Store and Google Play store, for distribution of our entertainment, media and mobile sports betting and online gaming applications.
−Removed: As such, the promotion, distribution and operation of our mobile applications are subject to the respective distribution platforms’ standard terms and policies, which are very broad and subject to frequent changes and interpretation.
−Removed: If Apple or Google choose to de-list any of our mobile applications due to what they perceive to be objectionable content or violation of Apple or Google rules or codes of conduct, it could have a material negative impact on our business.
−Removed: Further, the success of our Interactive segment depends in part on our relationships with other third-party service providers for hosting, content delivery, load balancing and protection against distributed denial-of-service attacks.
−Removed: If those providers do not perform adequately or terminate their relationship with us, our users may experience issues or interruptions with their experiences.
−Removed: We also rely on other software and services supplied by third parties, such as communications and internal software, and our business may be adversely affected to the extent such software and services do not meet our expectations, contain errors or vulnerabilities, are compromised or experience outages.
−Removed: Further, any negative publicity related to any of our third-party partners could adversely affect our reputation and brand.
−Removed: We incorporate technology from third parties throughout our business.
−Removed: We cannot be certain that our licensors are not infringing the intellectual property rights of others or that the suppliers and licensors have sufficient rights to the technology in all jurisdictions in which we may operate.
−Removed: Some of our license agreements may be terminated by our licensors for convenience.
−Removed: If we are unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against our suppliers and licensors or against us, or if we are unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms, our ability to develop our offerings could be severely limited and our business could be harmed.
−Removed: Additionally, if we are unable to obtain necessary technology from third parties, we may be forced to acquire or develop alternate technology, which may require significant time and effort and may be of lower quality or performance standards.
−Removed: This would limit and delay our ability to provide new or competitive offerings and increase our costs.
−Removed: If alternate technology cannot be obtained or developed, we may not be able to offer certain functionality as part of our offerings, which could adversely affect our business, financial condition and results of operations.
−Removed: Further, we rely on third-party geolocation and identity verification systems to ensure we are in compliance with certain laws and regulations related to our sports betting and online gaming services.
−Removed: There is no guarantee that the third-party geolocation and identity verification systems will perform adequately, or be effective, and any service disruption to those systems would prohibit us from operating our platform and would adversely affect our business.
−Removed: Additionally, incorrect or misleading geolocation and identity verification data with respect to current or potential users received from third-party service providers may result in us inadvertently allowing access to our offerings to individuals who should not be permitted to access them, or otherwise inadvertently deny access to individuals who should be able to access our offerings, in each case based on inaccurate identity or geographic location determination.
−Removed: Our third-party geolocation services providers rely on their ability to obtain information necessary to determine geolocation from mobile devices, operating systems, and other sources.
−Removed: Changes, disruptions or temporary or permanent failure to access such sources by our third-party services providers may result in their inability to accurately determine the location of our users.
−Removed: Moreover, our inability to maintain our existing contracts with third-party services providers, or to replace them with equivalent third parties, may result in our inability to access geolocation and identity verification data necessary for our day-to-day operations.
−Removed: If any of these risks materializes, we may be subject to disciplinary action, fines, lawsuits, and our business, financial condition and results of operations could be adversely affected.
−Removed: If internet and other technology-based service providers experience service interruptions, our ability to conduct our business may be impaired and our business, financial condition and results of operations could be adversely affected.
−Removed: As described in more detail below, a substantial portion of our network infrastructure is provided by third parties, including internet service providers and other technology-based service providers.
−Removed: We require technology-based service providers to implement cyber-attack-resilient systems and processes.
−Removed: However, if internet service providers experience service interruptions,
−Removed: because of cyber-attacks, or due to an event causing an unusually high volume of internet use (such as a pandemic or public health emergency), communications over the internet may be interrupted and impair our ability to conduct our business.
−Removed: Internet service providers and other technology-based service providers may in the future roll out upgraded or new mobile or other telecommunications services, such as 5G or 6G services, which may not be successful and thus may impact the ability of our users to access our offerings in a timely fashion or at all.
−Removed: In addition, our ability to process e-commerce transactions depends on payment processing and payment network systems.
−Removed: To prepare for system problems, we continuously seek to strengthen and enhance our current facilities and the capabilities of our system infrastructure and support.
−Removed: Nevertheless, there can be no assurance that the internet infrastructure or our own network systems will continue to be able to meet the demand placed on us by the continued growth of the internet, the overall sports betting and online gaming industry and our users.
−Removed: Any difficulties these providers face, including the potential of certain network traffic receiving priority over other traffic (i.e., lack of net neutrality), may adversely affect our business, and we exercise little control over these providers, which increases our vulnerability to problems with the services they provide.
−Removed: Any system failure as a result of reliance on third parties, such as hosting, network, software or hardware failure, or as a result of cyber-attacks, could cause a loss of our users’ property or personal information, or a delay or interruption in our online services and products and e-commerce services, including our ability to handle existing or increased traffic.
−Removed: Any such failure could result in a loss of anticipated revenue, interruptions to our offerings, cause us to incur significant legal, remediation and notification costs, degrade the customer experience and cause users to lose confidence in our offerings, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
−Removed: We rely on third party cloud infrastructure services to deliver our offerings to users.
−Removed: Any disruption of, or interference with, our use of these services could adversely affect our business, financial condition, results of operations, and prospects.
−Removed: We currently host our sports betting and online gaming offerings and support our operations using third-party providers of cloud infrastructure services.
−Removed: We do not, and will not, have control over the operations of the facilities or infrastructure of the third-party service providers that we use.
−Removed: Such third party’s facilities are vulnerable to damage or interruption from natural disasters, cyber security attacks, terrorist attacks, power outages and similar events or acts of misconduct.
−Removed: Our technology’s continuing and uninterrupted performance will be critical to our success and is dependent on the use of third-party cloud infrastructure services.
−Removed: We have experienced, and we expect that in the future we will experience, interruptions, delays and outages in service and availability from these third-party service providers from time to time due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions and capacity constraints.
−Removed: In addition, any changes in these third parties’ service levels may adversely affect our ability to meet the requirements of our users.
−Removed: Since our technology’s continuing and uninterrupted performance is critical to our success, sustained or repeated system failures would reduce the attractiveness of our offerings.
−Removed: It may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as we expand and the usage of our offerings increases.
−Removed: Any negative publicity arising from these disruptions could harm our reputation and brand and may adversely affect the usage of our offerings.
−Removed: Any of the above circumstances or events may harm our reputation and brand, reduce the availability or usage of our technology, lead to a significant loss of revenue, increase our costs and impair our ability to attract new users, any of which could adversely affect our business, financial condition and results of operations.
−Removed: We rely on strategic relationships with casinos, tribes and horse tracks in order to be able to offer our sports betting and online gaming products in certain jurisdictions.
−Removed: If we cannot establish and manage such relationships with such partners, our business, financial condition and results of operations could be adversely affected.
−Removed: Under the sports betting and online gaming laws of certain jurisdictions, sports betting and online gaming are limited to a finite number of retail operators, such as casinos, tribes or tracks, who own a “skin” or “skins” under that jurisdiction’s law.
−Removed: A “skin” is a legally-authorized license from a gaming regulatory authority to offer sports betting or online gaming services provided by such a retail operator.
−Removed: The “skin” provides a market access opportunity for mobile operators to operate in the jurisdiction pending licensure and other required approvals by the jurisdiction’s gaming regulatory authority.
−Removed: The entities that control those “skins,” and the numbers of “skins” available, are typically determined by a jurisdiction’s law authorizing sports betting or online gaming.
−Removed: In some of the jurisdictions in which we offer sports betting and online gaming, we currently rely on a casino, tribe or track in order to get a “skin.” These “skins” are what allows us to gain access to jurisdictions where online operators are required to have a retail relationship.
−Removed: If we cannot establish, renew or manage these relationships, our market access rights could terminate and we would not be allowed to operate in those jurisdictions until we enter into new ones.
−Removed: As a result, our business, financial condition and results of operations could be adversely affected.
−Removed: We rely on other third-party sports data providers for real-time and accurate data for sporting events, and if such third parties do not perform adequately or terminate their relationships with us, our costs may increase and our business, financial condition and results of operations could be adversely affected.
−Removed: We rely on third-party sports data providers to obtain accurate information regarding schedules, results, performance and outcomes of sporting events.
−Removed: We rely on this data to determine what sports bets to offer and when and how sports bets are settled.
−Removed: We have experienced, and may continue to experience, errors in these data feeds which may result in us incorrectly offering or settling bets.
−Removed: If we cannot adequately resolve issues with our users that result from such data feed errors, our users may have negative experiences with our offerings, our brand or reputation may be negatively affected and our users may be less inclined to continue or resume utilizing our products or recommend our offerings to other potential users.
−Removed: As such, a failure or significant interruption in our service may harm our reputation, business and operating results.
−Removed: Furthermore, if any of our sports data partners terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we would need to find an alternate provider, and may not be able to secure similar terms or replace such providers in an acceptable time frame.
−Removed: Any of these risks could increase our costs and adversely affect our business, financial condition and results of operations.
−Removed: Further, any negative publicity related to any of our third-party partners, including any publicity related to regulatory concerns, could adversely affect our reputation and brand, and could potentially lead to increased regulatory or litigation exposure.
+Added: Although a majority of our repair, clean-up, and lost business expenses have been covered by insurance in the past, there is no assurance that, given the increasing burdens on insurance companies from extreme weather events, we will be able to continue to obtain adequate insurance against these types of losses, or that our insurers in the future will be in a position to satisfy our claims.
+Added: In addition, the costs of insurance against these types of events have increased in recent years.
+Added: For example, the Company’s cost of insurance premiums on an annual basis was approximately $29.6 million in 2023 as compared to $25.4 million in 2022.
+Added: Additionally, our retail casino gaming, sports betting, and iCasino operations rely heavily on technology services and an uninterrupted supply of electrical power.
+Added: Any unscheduled disruption in our technology services or interruption in the supply of electrical power as a result of extreme weather, or otherwise, could result in an immediate, and possibly substantial, loss of revenues due to a shutdown of our retail casino gaming (including slot machines and security systems), sports betting, and iCasino operations.
+Added: We rely on third parties to provide services that are essential to the operation of our online sports betting and iCasino business, including geolocation, identity and age verification, payment processing, and sports data.
+Added: We rely on third parties to provide services that are essential to the operation of our online gaming business, including geolocation, identity and age verification, payment processing, and sports data systems to ensure we comply with laws and regulations, processing deposits and withdrawals made by our online users and providing information regarding schedules, results, performance, and outcomes of sporting events to determine when and how bets are settled.
+Added: The software, systems and services provided by our third-party providers may not meet our expectations, contain errors or weaknesses, be compromised or experience outages.
+Added: A failure of such third-party systems to perform effectively, or any service interruption to those systems, could adversely affect our business by preventing users from accessing our online platform, delaying payment or resulting in errors in settling bets, which could give rise to regulatory issues relating to the operation of our business.
+Added: By way of example, incorrect or misleading geolocation and identity verification data with respect to current or potential users received from third-party service providers may result in us inadvertently allowing access to our offerings to individuals who are not permitted to access them or otherwise inadvertently denying access to individuals who are permitted to access them.
+Added: Also, errors or failures by our payment processors and sports data providers could result in a failure to timely and accurately process payments to and from users or errors in settling bets.
+Added: Any such errors or failures could result in violations of applicable regulatory requirements and adversely affect our reputation and our ability to attract and retain our online users.
+Added: Furthermore, negative publicity related to any of our third-party partners could adversely affect our reputation and brand, and could potentially lead to increased regulatory or litigation exposure.
+Added: Additionally, we rely on third-party suppliers to provide gaming equipment, semiconductor chips and other supplies for our business.
+Added: Supply chain delays or disruptions could impact our ability to obtain these supplies from our key suppliers on acceptable terms or at all.
+Added: Any suspension or delay in our suppliers’ ability to provide us adequate equipment or supplies, or in our ability to procure equipment or supplies from other sources in a timely manner or at all, could impair our ability to meet customer demand and therefore could have a material adverse effect on our business, prospects, financial condition or results of operations.
+Added: In addition, if any of our third-party service providers terminates its relationship with us, is unable to maintain necessary regulatory approvals, or refuses to renew its agreement with us on commercially reasonable terms, we would have to find alternate service providers.
+Added: We cannot be certain that we would be able to secure favorable terms from alternative service providers that are critical to the operation of our business or enter into alternative arrangements in a timely manner.
+Added: business, results of operations, and prospects would be adversely impacted by our inability to or delay in securing replacement services that are sufficient to support our online business or are on comparable terms.
Our growth will depend, in part, on the success of our strategic relationships with third parties.
−Removed: Overreliance on certain third parties, or our inability to extend existing relationships or agree to new relationships may cause unanticipated costs for us and impact our financial performance in the future.
−Removed: We rely on relationships with sports leagues and teams, professional athletes and athlete organizations, advertisers, casinos and other third parties, including those affiliated with Barstool, in order to attract users to our property and online offerings.
+Added: We rely on relationships with sports leagues and teams, professional athletes and athlete organizations, advertisers, casinos, and other third parties, including those affiliated with ESPN, in order to attract users to our properties and online offerings, including ESPN BET.
These relationships, along with providers of online services, search engines, social media, directories and other websites and e-commerce businesses, direct consumers to our offerings.
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In the event that any of our existing relationships or our future relationships fails to provide services to us in accordance with the terms of our arrangement, or at all, and we are not able to find suitable alternatives, this could impact our ability to attract consumers cost effectively and harm our business, financial condition, results of operations, and prospects.
−Removed: Our information technology and other systems are subject to cyber security risk, including misappropriation of employee information, customer information or other breaches of information security, particularly as our Interactive segment grows.
−Removed: We increasingly rely on information technology and other systems (particularly as our Interactive segment grows), including our own systems and those of service providers and third parties, to manage our business and employee data and maintain and transmit customers’ personal and financial information, payment settlements, payment funds transmissions, mailing lists, and reservations information.
−Removed: Our collection of such data is subject to extensive regulation by private groups, such as the payment card industry, as well as governmental authorities, including gaming regulatory authorities.
−Removed: Privacy regulations continue to evolve and we have taken, and will continue to take, steps to comply by implementing processes designed to safeguard the confidential and personal information of our business, employees and customers.
−Removed: In addition, our security measures are reviewed and evaluated regularly.
−Removed: However, our information and processes and those of our service providers and other third parties, including our contractors and contractors of our service providers and vendors, are subject to the ever-changing threat of compromised security, in the form of a risk of potential breach, system failure, computer virus, or unauthorized or fraudulent use by customers, company employees, company contractors and other third parties including employees and contractors of third party vendors.
−Removed: The steps we take to deter and mitigate the risks of breaches may not be successful, and any resulting compromise or loss of data or systems could adversely impact operations or regulatory compliance and could result in remedial expenses, fines, litigation, disclosures, and loss of reputation, potentially impacting our financial results.
−Removed: Further, as cyber-attacks continue to evolve, we may incur significant costs in our attempts to modify or enhance our protective measures or investigate or remediate any actual or perceived vulnerability.
−Removed: Increased instances of cyber-attacks may also have a negative reputational impact on us and our properties that may result in a loss of customer confidence and, as a result, may have a material adverse effect on our financial condition, results of operations, and cash flows.
−Removed: As our Interactive segment grows, we will face increased cyber risks and threats that seek to damage, exploit, disrupt or gain access to our networks, our products and services, consumer information, and our supporting infrastructure.
−Removed: Any failure to prevent or mitigate security breaches or cyber risk could result in interruptions to the services we provide, degrade the user
−Removed: experience, and cause our users to lose confidence in our products and services.
−Removed: The unauthorized access, acquisition or disclosure of consumer information could compel us to comply with disparate breach notification laws and otherwise subject us to proceedings by governmental entities, including gaming regulatory authorities, or others and substantial legal and financial liability.
−Removed: This could harm our business and reputation, disrupt our relationships with partners and diminish our competitive position.
−Removed: Our growth prospects may suffer if we are unable to develop successful offerings or if we fail to pursue additional offerings.
−Removed: In addition, if we fail to make the right investment decisions in our offerings, we may not attract and retain key users and our revenue and results of operations may decline.
−Removed: The industries in which we operate are subject to rapid and frequent changes in standards, technologies, products and service offerings, as well as in customer demands and expectations and regulations.
−Removed: We must continuously make decisions regarding in which offerings, properties and technology we should invest to meet customer demand in compliance with evolving industry standards and regulatory requirements and must continually introduce and successfully market new and innovative technologies, offerings and enhancements to remain competitive and generate customer demand, acceptance and engagement.
−Removed: Our ability to engage, retain, and increase our user base and to increase our revenue will depend heavily on our ability to successfully create new offerings, both independently and together with third parties, transform properties and invest in innovative technologies.
−Removed: We may introduce significant changes to our existing technology and offerings or develop and introduce new and unproven products and services, with which we have little or no prior development or operating experience.
−Removed: The process of developing new offerings and systems is inherently complex and uncertain, and new offerings may not be well received by users, even if well-reviewed and of high quality.
−Removed: If we are unable to develop technology and products that address users’ needs or enhance and improve our existing technology and offerings in a timely manner, we could experience a material adverse effect on our business, financial condition, results of operations and prospects.
−Removed: Although we intend to continue investing in our research and development efforts, if new or enhanced offerings fail to engage our users or partners, we may fail to attract or retain users or to generate sufficient revenue, operating margin, or other value to justify our investments, any of which may seriously harm our business.
−Removed: In addition, management may not properly ascertain or assess the risks of new initiatives, and subsequent events may alter the risks that were evaluated at the time we decided to execute any new initiative.
−Removed: Creating additional offerings can also divert our management’s attention from other business issues and opportunities.
−Removed: Even if our new offerings attain market acceptance, those new offerings could exploit the market share of our existing product offerings or share of our users’ wallets in a manner that could negatively impact their ecosystem.
−Removed: Furthermore, such expansion of our business increases the complexity of our business and places an additional burden on our management, operations, technical systems and financial resources and we may not recover the often-substantial up-front costs of developing and marketing new offerings, or recover the opportunity cost of diverting management and financial resources away from other offerings.
−Removed: In the event of continued growth of our operations, products or in the number of third-party relationships, we may not have adequate resources, operationally, technologically or otherwise to support such growth and the quality of our technology, offerings or our relationships with third parties could suffer.
−Removed: In addition, failure to effectively identify, pursue and execute new business initiatives, or to efficiently adapt our processes and infrastructure to meet the needs of our innovations, may adversely affect our business, financial condition, results of operations and prospects.
−Removed: Any new offerings may also require our users to utilize new skills to use our offerings.
−Removed: This could create a lag in adoption of new offerings and new user additions related to any new offerings.
−Removed: To date, new offerings and enhancements of our existing technology have not hindered our user growth or engagement, but that may be the result of a large portion of our user base being in a younger demographic and more willing to invest the time to learn to use our products most effectively.
−Removed: To the extent that future users, including those in older demographics, are less willing to invest the time to learn to use our products, and if we are unable to make our products easier to learn to use, our user growth or engagement could be affected, and our business could be harmed.
−Removed: We may also develop new products that increase user engagement and costs without increasing revenue.
−Removed: Additionally, we may make bad or unprofitable decisions regarding these investments.
−Removed: If new or existing competitors offer more attractive offerings, we may lose users or users may decrease their spending on our offerings.
−Removed: New customer demands, superior competitive offerings, new industry standards or changes in the regulatory environment could render our existing offerings unattractive, unmarketable or obsolete and require us to make substantial unanticipated changes to our technology or business model.
−Removed: Our failure to adapt to a rapidly changing market or evolving customer demands could harm our business, financial condition, results of operations and prospects.
−Removed: The growth of our Interactive segment will depend on our ability to attract and retain users.
−Removed: Our ability to achieve growth in revenue in the future in our Interactive segment and its Barstool Sportsbook and theScore Bet sports betting and online gaming apps will depend, in large part, upon our ability to attract new users to our offerings, retain existing users of our offerings and reactivate users in a cost-effective manner.
−Removed: Achieving growth in our community of users may
−Removed: require us to increasingly engage in sophisticated and costly sales and marketing and promotional efforts, which may not make sense in terms of return on investment.
+Added: Additionally, under the sports betting and iCasino laws of certain jurisdictions, sports betting and iCasinos are limited to a finite number of retail operators, such as casinos, tribes or tracks, who own a “skin” or “skins” under that jurisdiction’s law.
+Added: A “skin” is a legally authorized license from a gaming regulatory authority to offer sports betting or iCasino services provided by such a retail operator.
+Added: The “skin” provides a market access opportunity for mobile operators to operate in the jurisdiction pending licensure and other required approvals by the jurisdiction’s gaming regulatory authority.
+Added: In some of the jurisdictions in which we offer sports betting and iCasino, we currently rely on a casino, tribe, or track in order to get a “skin.” If we cannot establish, renew or manage these relationships, our market access rights could terminate, and we would not be allowed to operate in those jurisdictions until we enter into new ones.
+Added: As a result, our business, financial condition and results of operations could be adversely affected.
+Added: We are reliant on our partnership with ESPN, and our failure to maintain that relationship could negatively impact our business, reputation and strategic goals.
+Added: On August 8, 2023, we entered into the Sportsbook Agreement with ESPN, which provides for a long-term strategic relationship between PENN and the ESPN relating to online sports betting in the United States.
+Added: Pursuant to the Sportsbook Agreement, PENN rebranded the existing Barstool Sportsbook across all online platforms in the United States as ESPN BET (the “Sportsbook”) and oversees daily operations of the Sportsbook.
+Added: The Sportsbook Agreement provides PENN with an exclusive license to use the ESPN BET trademark in the United States in connection with the Sportsbook.
+Added: In addition, pursuant to the Sportsbook Agreement, ESPN provides certain marketing, content integration and promotional services.
+Added: The Sportsbook Agreement generally will expire in 2033, unless the parties agree to an additional ten year extension;
+Added: however, the Sportsbook Agreement may be terminated by ESPN prior to 2033 under certain circumstances, including if the Sportsbook’s market access is not at least a specified percentage of the total market access by the online sportsbook operator with the most expansive market access.
+Added: Any termination or loss of exclusivity of our exclusive license would have a material adverse effect on our business, financial condition or results of operations.
+Added: The growth of our Interactive segment will depend on our ability to attract and retain users and require investments in our online offerings, technology, and strategic marketing initiatives.
+Added: Our ability to achieve revenue growth in the future in our Interactive segment (inclusive of ESPN BET, theScore Bet sports betting and iCasino app, and Hollywood iCasino) will depend, in large part, upon our ability to attract new users to our offerings, retain existing users and reactivate inactive users in a cost-effective manner.
+Added: Achieving growth in our community of users may require us to increasingly engage in sophisticated and costly sales and marketing and promotional efforts, which may not make sense in terms of return on investment.
+Added: We cannot be sure that our investments in technology, products, service offerings and marketing initiatives will be successful or generate the return on investment that we expect.
+Added: If new or existing competitors offer more attractive offerings or engage in marketing initiatives that are better received by customers, we may lose users or users may decrease their spending on our offerings.
We have used and expect to continue to use a variety of free and paid marketing channels, in combination with compelling offers and exciting games to achieve our objectives.
For paid marketing, we may leverage a broad array of advertising channels, including television, radio, sports teams, social media influencers (brand ambassadors), social media platforms, such as Facebook, Instagram, Twitter and Snapchat, affiliates and paid and organic search, and other digital channels, such as mobile display.
−Removed: If the search engines on which we rely modify their algorithms, change their terms around sports betting or online gaming, or if the prices at which we may purchase listings increase, then our costs could increase, and fewer users may click through to our website.
−Removed: If links to our apps or websites are not displayed prominently in online search results, if fewer users click through to the Apple App Store and Google Play Store or our websites, if our other digital marketing campaigns are not effective, if the costs of attracting users using any of our current methods significantly increase, then our ability to efficiently attract new users could be reduced, our revenue could decline and our business, financial condition and results of operations could be harmed.
−Removed: In addition, our ability to increase the number of users of our offerings will depend on continued user adoption of the Barstool Sportsbook and theScore Bet apps and online gaming in general.
−Removed: Growth in the sportsbook and online gaming industries and the level of demand for and market acceptance of our product offerings will be subject to a high degree of uncertainty.
+Added: If the search engines on which we rely modify their algorithms, change their terms around online betting, if links to our apps or websites are not displayed prominently in online search results, if fewer users click through to the Apple App Store and Google Play Store or our websites, if our other digital marketing campaigns are not effective, or if the costs of attracting users
+Added: using any of our current methods significantly increase, then our ability to efficiently attract new users could be reduced, our revenue could decline and our business, financial condition and results of operations could be harmed.
+Added: In addition, our ability to increase the number of users of our offerings will depend on continued user adoption of the ESPN BET, theScore Bet apps, and online gaming in general.
+Added: Growth in the online gaming industries and the level of demand for and market acceptance of our product offerings will be subject to a high degree of uncertainty.
We cannot assure that consumer adoption of our product offerings will continue or exceed current growth rates, or that the industry will achieve more widespread acceptance.
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Participation in the sports betting industry exposes us to trading, liability management, and pricing risk.
−Removed: We may experience lower than expected profitability and potentially significant losses as a result of a failure to determine accurately the odds in relation to any particular event and/or any failure of our sports risk management processes and controls.
Our fixed-odds betting products involve betting where winnings are paid on the basis of the stake placed and the odds quoted.
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In addition, if a jurisdiction where we hold or wish to apply for a license imposes a high turnover tax for betting (as opposed to a gross-win tax), this too would impact profitability, particularly with high value/low margin bets, and likewise have a material adverse effect on our business.
−Removed: We follow the sports betting industry practice of restricting and managing betting limits at the individual customer level based on individual customer profiles and risk level to the enterprise;
+Added: We follow the sports betting industry practice of restricting and managing betting limits at the individual customer level based on individual customer profiles and enterprise risk;
however, there is no guarantee that gaming regulatory authorities will allow operators such as us to place limits at the individual customer level.
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We believe the majority of operators balance taking reasonable action from all customers against the risk of individual customers significantly harming the business viability.
−Removed: We cannot guarantee that all jurisdictions will allow us to execute limits at the individual customer level, or at our sole discretion.
+Added: We cannot guarantee that all jurisdictions will allow us to execute limits at the individual customer level, or at our sole discretion, which may in turn impact our ability to manage sports betting risk.
We extend credit to a portion of our customers who wager at our retail properties, and we may not be able to collect gaming receivables from our credit customers.
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We extend credit to those customers whose level of play and financial resources warrant, in the opinion of management, an extension of credit.
−Removed: These large receivables could have a significant impact on our results of operations if deemed uncollectible.
+Added: These large receivables could have a significant impact on our business, financial condition and results of operations if deemed uncollectible.
Gaming debts evidenced by a credit instrument, including what is commonly referred to as a “marker,” and judgments on gaming debts are enforceable under the current laws of the jurisdictions in which we allow play on a credit basis, and judgments on gaming debts in such jurisdictions are enforceable in all U.S.
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Although courts of some foreign nations will enforce gaming debts directly and the assets in the U.S.
−Removed: of foreign debtors may be reached to satisfy a judgment, judgments on gaming debts from U.S.
+Added: of foreign debtors may be
+Added: reached to satisfy a judgment, judgments on gaming debts from U.S.
courts are not binding on the courts of many foreign nations.
−Removed: The success, including win or hold rates, of existing or future retail and online sports betting and online gaming products depends on a variety of factors and is not completely controlled by us.
+Added: The success, including win or hold rates, of existing or future retail, sports betting, and iCasino products depends on a variety of factors and is not completely controlled by us.
The retail and online gaming industries are characterized by an element of chance.
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Although each Gaming Offering generally performs within a defined statistical range of outcomes, actual outcomes may vary for any given period.
−Removed: In addition to the element of chance, win rates (hold percentages) may also (depending on the game involved) be affected by the spread of limits and factors that are beyond our control, such as a user’s skill, experience and behavior, the mix of games played, the financial resources of users, the volume of bets placed and the amount of time spent gambling.
+Added: In addition to the element of chance, win rates (hold percentages) may also (depending on the game involved) be affected by the spread of limits and factors that are beyond our control, such as a user’s skill, experience, and behavior, the mix of games played, the financial resources of users, the volume of bets placed and the amount of time spent playing.
As a result of the variability in these factors, the actual win rates on our Gaming Offerings may differ from the theoretical win rates we have estimated and could result in the user’s winnings exceeding those anticipated.
−Removed: The variability of win rates (hold rates) also have the potential to negatively impact our financial condition, results of operations, and cash flows.
+Added: For example, in the past, certain VIP patrons have placed bets that resulted in large payouts and negatively impacted our results of operations.
+Added: Similar events caused by the variability of win rates (hold rates) have the potential to negatively impact our business, financial condition, results of operations, and cash flows.
Our success also depends in part on our ability to anticipate and satisfy user preferences in a timely manner.
−Removed: As we will operate in a dynamic environment characterized by rapidly changing industry and legal standards, our products will be subject to changing consumer preferences that cannot be predicted with certainty.
+Added: As we operate in a dynamic environment characterized by rapidly changing industry and legal standards, our products will be subject to changing consumer preferences that cannot be predicted with certainty.
We will need to continually introduce new offerings and identify future product offerings that complement our existing technology, respond to our users’ needs and improve and enhance our existing technology to maintain or increase our user engagement and growth of our business.
We may not be able to compete effectively unless our product selection keeps up with trends in the retail and digital sports entertainment, sports betting, and gaming industries in which we compete, or trends in new gaming products.
−Removed: We face a number of challenges prior to opening new or upgraded gaming properties or launching new online gaming or sports betting channels, which may lead to increased costs and delays in anticipated revenues.
−Removed: No assurance can be given that, when we endeavor to open new or upgraded retail gaming properties or launch new online gaming or sports betting channels, the expected timetables for opening such properties or channels will be met in light of the uncertainties inherent in the development of the regulatory framework, construction, the licensing process, legislative action and litigation.
−Removed: In addition, as we seek to launch online gaming and sports betting offerings in additional jurisdictions, we will need to hire additional qualified employees, such as engineers, IT professionals, product managers and compliance personnel.
+Added: We face a number of challenges prior to opening new or upgraded gaming properties, launching iCasinos and sports betting in new jurisdictions, or launching new iCasino or sports betting offerings.
+Added: No assurance can be given that, when we endeavor to open new or upgraded retail gaming properties, expand sports betting or iCasinos in new jurisdictions, or launch new sports betting or iCasino offerings, the expected timetables for opening or expanding such properties or offerings will be met in light of the uncertainties inherent in the development of the regulatory framework, construction and/or development, the licensing process, legislative action and litigation.
+Added: In addition, as we seek to launch sports betting or iCasino offerings in additional jurisdictions, we will need to hire additional qualified employees, such as software engineers, IT professionals, product managers and compliance personnel.
Given the significant competition in this area for qualified candidates, we may be unable to hire qualified candidates.
−Removed: Delays in opening new or upgraded properties could lead to increased costs and delays in receiving anticipated revenues with respect to such properties or channels and could have a material adverse effect on our financial condition, results of operations, and cash flows.
−Removed: Risks Related to Our Capital Structure
−Removed: Our indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under our outstanding indebtedness.
−Removed: As of December 31, 2022, we had indebtedness of $2.8 billion, including $1.5 billion outstanding under our Amended Credit Facilities.
−Removed: We are also required to make annual minimum lease payments to our REIT Landlords pursuant to the Triple Net Leases, which we currently expect will be approximately $863.6 million for the year ending December 31, 2023.
−Removed: Additionally, our Triple Net Leases are subject to annual escalators, percentage rent, and rent resets, as applicable.
−Removed: We have indebtedness and significant fixed annual lease payments under the Triple Net Leases.
−Removed: Our indebtedness and additional fixed costs under our Lease obligations have important consequences to our financial health.
−Removed: The lack of availability and cost of financing could have an adverse effect on our business.
−Removed: We may finance some of our current and future expansion, development and renovation projects and acquisitions with cash flow from operations, borrowings under our Amended Credit Facilities and equity or debt financings.
−Removed: For more information regarding our future development projects, see “Recent Acquisitions, Development Projects and Other” in the Executive Overview within our Management’s Discussion and Analysis.
−Removed: If we are unable to finance our current or future projects, we could have to seek alternative financing.
−Removed: Depending on credit market conditions, including the current high interest rate environment, alternative sources of funds may not be sufficient to finance our expansion, development and/or renovation, or such other financing may not be available on acceptable terms, in a timely manner or at all.
−Removed: In addition, our existing indebtedness contains restrictions on our ability to incur additional indebtedness.
−Removed: If we are unable to secure additional financing, we could be forced to limit or suspend expansion, development and renovation projects and acquisitions, which may adversely affect our financial condition, results of operations, and cash flows.
−Removed: The capacity under our Amended Revolving Credit Facility is $1.0 billion, of which $977.5 million is available as of December 31, 2022.
−Removed: Our Amended Revolving Credit Facility expires in 2027.
−Removed: There is no certainty that our lenders will continue to remain solvent or fund their respective obligations under our Amended Credit Facilities.
−Removed: To service our indebtedness, we will require a significant amount of cash, which depends on many factors beyond our control.
−Removed: There is no assurance that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our Amended Credit Facilities in amounts sufficient to enable us to fund our liquidity needs, including with respect to our indebtedness.
−Removed: Our variable rate borrowings expose us to interest rate volatility, which could cause our debt service obligations to increase significantly.
−Removed: We also may incur indebtedness related to properties we develop or acquire in the future prior to generating cash flow from those properties.
−Removed: If those properties do not provide us with cash flow to service that indebtedness, we will need to rely on cash flow from our other properties, which would increase our leverage.
−Removed: In addition, if we consummate significant acquisitions in the future, our cash requirements may increase significantly.
+Added: Delays in opening new or upgraded properties or offerings, or expanding offerings in new jurisdictions, could lead to increased costs and delays in receiving anticipated revenues with respect to such properties or offerings and could have a material adverse effect on our business, prospects, financial condition, results of operations, and cash flows.
+Added: Risks Related to our Information Systems and Technology
+Added: If our third-party mobile application distribution platforms or service providers do not perform adequately or terminate their relationships with us, our costs may increase.
+Added: Our success depends in part on our relationships with other third-party service providers.
+Added: We rely upon third-party distribution platforms, including the Apple App Store and Google Play store, for distribution of our entertainment, media, and mobile sports betting and iCasino applications.
+Added: As such, the promotion, distribution, and operation of our mobile applications are subject to the respective distribution platforms’ standard terms and policies, which are very broad and subject to frequent changes and interpretation.
+Added: If Apple or Google choose to de-list any of our mobile applications due to what they perceive to be objectionable content or violation of Apple or Google rules or codes of conduct, it could have a material negative impact on our business, financial condition, and results of operations.
+Added: Further, the success of our Interactive segment depends in part on our relationships with other third-party service providers for hosting, content delivery, load balancing and protection against distributed denial-of-service attacks.
+Added: If those providers do not perform adequately or terminate their relationship with us, our users may experience issues or interruptions with their experiences.
+Added: We also rely on other software and services supplied by third parties, such as communications and internal software, and our business may be adversely affected to the extent such software and services do not meet our expectations,
+Added: contain errors or vulnerabilities, are compromised or experience outages.
+Added: Further, any negative publicity related to any of our third-party partners could adversely affect our reputation and brand.
+Added: We incorporate technology from third parties throughout our business.
+Added: We cannot be certain that our licensors are not infringing the intellectual property rights of others or that the suppliers and licensors have sufficient rights to the technology in all jurisdictions in which we may operate.
+Added: Some of our license agreements may be terminated by our licensors for convenience.
+Added: If we are unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against our suppliers and licensors or against us, or if we are unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms, our ability to develop our offerings could be severely limited and our business could be harmed.
+Added: Additionally, if we are unable to obtain necessary technology from third parties, we may be forced to acquire or develop alternate technology, which may require significant time and effort and may be of lower quality or performance standards.
+Added: This would limit and delay our ability to provide new or competitive offerings and increase our costs.
+Added: If alternate technology cannot be obtained or developed, we may not be able to offer certain functionality as part of our offerings, which could adversely affect our business, financial condition, and results of operations.
+Added: If internet and other technology-based service providers experience service interruptions, our ability to conduct our business may be impaired.
+Added: As described in more detail below, a substantial portion of our technological and network infrastructure is provided by third parties, including internet service providers and other technology-based service providers.
+Added: We require technology-based service providers to implement cyber-attack-resilient systems and processes.
+Added: However, if internet service providers experience service interruptions, because of cyber-attacks, or due to an event causing an unusually high volume of internet use (such as a pandemic or public health emergency), communications over the internet may be interrupted and impair our ability to conduct our business.
+Added: Internet service providers and other technology-based service providers may in the future roll out upgraded or new mobile or other telecommunications services, such as 5G or 6G services, which may not be successful and thus may impact the ability of our users to access our offerings in a timely fashion or at all.
+Added: In addition, our ability to process transactions, both at our retail properties and online, depends on point-of-sale, payment processing, payment network and database systems.
+Added: To prepare for system problems, we continuously seek to strengthen and enhance our current facilities and the capabilities of our system infrastructure and support.
+Added: Nevertheless, there can be no assurance that these systems will continue to be able to meet the demand placed on us by our customers and the continued growth of the internet, the overall sports betting, and iCasino industry.
+Added: Any difficulties these providers face, including the potential of certain network traffic receiving priority over other traffic (i.e., lack of net neutrality), may adversely affect our business, and we exercise little control over these providers, which increases our vulnerability to problems with the services they provide.
+Added: Any system failure as a result of reliance on third parties, such as hosting, network, software or hardware failure, or as a result of cyber-attacks, could cause a loss of our users’ property or personal information, or a delay or interruption in our online services and products and e-commerce services, including our ability to handle existing or increased traffic.
+Added: Any such failure could result in a loss of anticipated revenue, interruptions to our offerings, cause us to incur significant legal, remediation and notification costs, degrade the customer experience, and cause users to lose confidence in our offerings, any of which could have a material adverse effect on our business, financial condition, results of operations, and prospects.
+Added: We rely on third party cloud infrastructure services to deliver our offerings to users.
+Added: We currently host our online sports betting and iCasino offerings and support our operations using third-party providers of cloud infrastructure services.
+Added: We do not, and will not, have control over the operations of the facilities or infrastructure of the third-party service providers that we use.
+Added: Such third party’s facilities are vulnerable to damage or interruption from natural disasters, cybersecurity attacks, terrorist attacks, power outages and similar events or acts of misconduct.
+Added: Our technology’s continuing and uninterrupted performance will be critical to our success and is dependent on the use of third-party cloud infrastructure services.
+Added: We have experienced, and we expect that in the future we will experience interruptions, delays, and outages in service and availability from these third-party service providers from time to time due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions and capacity constraints.
+Added: In addition, any changes in these third parties’ service levels may adversely affect our ability to meet the requirements of our users.
+Added: Since our technology’s continuing and uninterrupted performance is critical to our success, sustained or repeated system failures would reduce the attractiveness of our offerings.
+Added: It may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as we expand and the usage of our offerings increases.
+Added: Any of the above circumstances or events may harm our reputation and brand, reduce the availability or usage of our technology, lead to a significant loss of revenue, increase our costs and impair our ability to attract new users, any of which could adversely affect our business, financial condition, and results of operations.
+Added: Our information technology and other systems are subject to cybersecurity risk, including misappropriation of employee information, customer information, or other breaches of information security.
+Added: We increasingly rely on information technology and other systems (particularly as our Interactive segment grows), including our own systems and those of service providers and third parties, to manage our business and employee data and maintain and transmit customers’ personal and financial information, payment settlements, payment funds transmissions, mailing lists, and reservations information.
+Added: Our collection of such data is subject to extensive regulation by private groups, such as the payment card industry, as well as governmental authorities, including gaming regulatory authorities.
+Added: Privacy regulations continue to evolve, and we have taken, and will continue to take, steps to comply by implementing processes designed to safeguard the confidential and personal information of our business, employees, and customers.
+Added: In addition, our security measures are reviewed and evaluated regularly.
+Added: However, our information and processes and those of our service providers and other third parties, including our contractors and contractors of our service providers and vendors, are subject to the ever-changing threat of compromised security, in the form of a risk of potential breach, system failure, computer virus, or unauthorized or fraudulent use by customers, company employees, company contractors and other third parties including employees and contractors of third-party vendors.
+Added: In recognition of these heightened risks, our Board of Directors and Audit Committee receive regular presentations and reports on material cybersecurity risks which might impact us.
+Added: Cybersecurity of this Annual Report on Form 10-K for additional detail regarding the programs, policies, and procedures we have in place to identify, prevent and detect any breaches, viruses, or other forms of unauthorized access.
+Added: The steps we take to deter and mitigate the risks of attacks may not be successful, and any resulting compromise or loss of data or systems could adversely impact operations or regulatory compliance and could result in remedial expenses, fines, litigation, disclosures, and loss of reputation, potentially impacting our financial results.
+Added: Further, as cyber-attacks continue to evolve, we may incur significant costs in our attempts to modify or enhance our protective measures or investigate or remediate any actual or perceived vulnerability.
+Added: Increased instances of cyber-attacks may also have a negative reputational impact on us and our properties that may result in a loss of customer confidence and, as a result, may have a material adverse effect on our business, financial condition, results of operations, and cash flows.
+Added: We have experienced attempts by unauthorized third parties to damage, exploit, disrupt or gain access to our networks, our products and services, consumer information, and our supporting infrastructure.
+Added: While to date none of these incidents has had a material impact on us, we expect to continue to be targeted in the future.
+Added: Any failure to prevent or mitigate security breaches or cyber risk could result in interruptions to the services we provide, degrade the user experience, and cause our users to lose confidence in our products and services.
+Added: The unauthorized access, acquisition or disclosure of consumer information could compel us to comply with disparate breach notification laws and otherwise subject us to proceedings by governmental entities, including gaming regulatory authorities, or others, and substantial legal and financial liability.
+Added: This could harm our business and reputation, disrupt our relationships with partners and diminish our competitive position.
Legal and Regulatory Risk Factors
−Removed: We are or may become involved in legal proceedings that, if adversely adjudicated or settled, could impact our financial condition and results of operations.
+Added: We are or may become involved in legal proceedings, and no assurance can be provided as to the outcome of these matters.
From time to time, we are defendants in various lawsuits relating to matters incidental to our business.
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As with all litigation, no assurance can be provided as to the outcome of these matters and, in general, litigation can be expensive and time consuming.
−Removed: We may not be successful in these lawsuits, and, especially with increasing class action claims in our industry, litigation could result in costs, settlements, or damages that could significantly impact our financial condition, results of operations, and cash flows.
−Removed: We face extensive regulation from gaming regulatory authorities, which could have a material adverse effect on us.
−Removed: As owners and managers of retail casino gaming, online gaming, sports betting, video lottery, VGTs, and pari-mutuel wagering operations, we are subject to extensive state, provincial and local regulation.
+Added: We may not be successful in these lawsuits, and, especially with increasing class action claims in our industry, litigation could result in costs, settlements, or damages that could significantly impact our business, financial condition, results of operations, and cash flows.
+Added: We face extensive regulation from gaming regulatory authorities.
+Added: As owners and managers of retail casino gaming, iCasino, sports betting, video lottery, VGTs, and pari-mutuel wagering operations, we are subject to extensive state, provincial and local regulation.
These gaming regulatory authorities have broad discretion, and may, for any reason set forth in the applicable legislation, rules and regulations, limit, condition, suspend, fail to renew or revoke a license or registration to conduct gaming operations or prevent us from owning the securities of any of our gaming subsidiaries or prevent another person from owning an equity interest in us.
−Removed: Like all gaming operators in the jurisdictions in which we operate, we must periodically apply to renew our gaming licenses or registrations and have the
−Removed: suitability of certain of our directors, officers, employees and contractors approved.
−Removed: There is no assurance that we will be able to obtain such renewals or approvals.
−Removed: Gaming regulatory authorities have input into our operations, for instance, hours of operation, location or relocation of a facility, numbers and types of slot machines and table games, and the types of sports events or casino games we may offer as part of our sports betting and online gaming operations.
+Added: Gaming regulatory authorities have input into our operations, for instance, our hours of operation, the location or relocation of any of our properties, numbers and types of slot machines and table games, and the types of sports events or casino games we may offer as part of our sports betting and iCasino operations.
Gaming regulatory authorities may not have extensive experience in the digital media industry, which may present unique challenges in regulating our business.
−Removed: Regulators may also levy substantial fines or penalties against us or our subsidiaries for violations of gaming laws or regulations, or against the people involved in violating such gaming laws or regulations, and/or seize our assets or the assets of our subsidiaries.
−Removed: Any of these events could have a material adverse effect on our financial condition, results of operations, and cash flows.
+Added: Regulators may also levy substantial fines or penalties against us or our subsidiaries for violations of gaming laws or regulations, or against the people involved in violating such gaming laws or
+Added: regulations, and/or seize our assets or the assets of our subsidiaries.
+Added: Any of these events could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Regulations governing the conduct of gaming activities and the obligations of gaming companies in any jurisdiction in which we have or in the future may have gaming operations are subject to change and could impose additional operating, financial, competitive or other burdens on the way we conduct our business.
−Removed: In particular, certain areas of law governing new gaming activities, such as the federal, state and provincial laws applicable to retail casino gaming, online gaming, and sports betting, are new or developing in light of emerging technologies.
−Removed: New and developing areas of law may be subject to the interpretation of the government agencies tasked with enforcing them and/or courts in which parties challenge the interpretation or enforcement of them.
−Removed: In some circumstances, a government agency may interpret a statute or regulation in one manner and then reconsider its interpretation at a later date.
+Added: In particular, certain areas of law governing new gaming activities, such as the federal, state, and provincial laws applicable to retail casino gaming, online casinos, and sports betting, are new or developing in light of emerging technologies.
No assurance can be provided that government agencies will interpret or enforce new or developing areas of law consistently, predictably, or favorably.
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In addition, from time to time, legislators and special interest groups have proposed legislation that would expand, restrict, or prevent gaming operations or which may otherwise adversely impact our operations in the jurisdictions in which we operate.
−Removed: Any expansion of gaming or restriction on or prohibition of our gaming operations or enactment of other adverse regulatory changes could have a material adverse effect on our operating results.
+Added: Any expansion of gaming or restriction on or prohibition of our gaming operations or enactment of other adverse regulatory changes could have a material adverse effect on our business, financial condition, and operating results.
Certain public and private issuances of securities and other transactions that we are party to also require the approval of some gaming regulatory authorities.
−Removed: We have demonstrated suitability to obtain and have obtained all governmental licenses, registrations, permits, and approvals necessary for us to operate our existing gaming and pari-mutuel properties and sports betting and online gaming businesses.
+Added: We have demonstrated suitability to obtain and have obtained all governmental licenses, registrations, permits, and approvals necessary for our existing gaming and pari-mutuel properties and sports betting and iCasino operations.
There can be no assurance that we will be able to retain and renew those existing licenses or demonstrate suitability to obtain any new licenses, registrations, permits, or approvals.
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The approval process can be time-consuming and costly, and we cannot be sure that we will be successful.
−Removed: Furthermore, this risk is particularly pertinent to our online gaming and sports betting initiatives because regulations in this area are not as fully developed or established.
+Added: Furthermore, this risk is particularly pertinent to our sports betting and iCasino initiatives because regulations in this area are not as fully developed or established.
Gaming regulatory authorities generally can require that any record holder or beneficial owner of our securities file an application for a license or similar finding of suitability.
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Gaming regulatory authorities may also conduct investigations into the conduct or associations of our directors, officers, key employees, joint venture partners or vendors to ensure compliance with applicable laws, regulations, and standards.
−Removed: We are subject to certain federal, state, provincial and other regulations, and if we fail to comply with such regulations, it could have a material adverse effect on our financial condition, results of operations, and cash flow.
+Added: We are subject to certain federal, state, provincial and other regulations.
We are subject to certain federal, state, provincial, and local laws, regulations and ordinances that apply to businesses generally.
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Treasury Department, requires us to report currency transactions in excess of $10,000 occurring within a gaming day, including identification of the guest by name and social security number, to the IRS.
−Removed: This regulation also requires us to report certain
−Removed: suspicious activity, including any transaction that exceeds $5,000 that we know, suspect or have reason to believe involves funds from illegal activity or is designed to evade federal regulations or reporting requirements and to verify sources of funds, in response to which we have implemented Know Your Customer processes.
+Added: This regulation also requires us to report certain suspicious activity, including any transaction that exceeds $5,000 that we know, suspect or have reason to believe involves funds from illegal activity or is designed to evade federal regulations or reporting requirements and to verify sources of funds, in response to which we have implemented Know Your Customer processes.
Periodic audits by the IRS and our internal audit department assess compliance with the Bank Secrecy Act, and substantial penalties can be imposed against us if we fail to comply with this regulation.
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Further, since we deal with significant amounts of cash in our operations, we are subject to various reporting and anti-money laundering regulations.
−Removed: Any violation of anti-money laundering laws or regulations, or any accusations of money laundering or regulatory investigations into possible money laundering activities, by any of our properties, online gaming operations, employees, partners, affiliates, or customers could have a material adverse effect on our financial condition, results of operations, and cash flows.
+Added: Any violation of anti-money laundering laws or regulations, or any accusations of money laundering or regulatory investigations into possible money laundering activities, by any of our properties, online gaming operations, employees, partners, affiliates, or customers could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
The riverboats on which we operate must also comply with certain federal and state laws and regulations with respect to boat design, on-board facilities, equipment, personnel, and safety.
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We are also subject to a variety of other federal, state, and local laws and regulations, including those relating to zoning, construction, land use, employment, marketing, and advertising and the production, sale, and service of alcoholic beverages.
−Removed: If we are not in compliance with these laws and regulations or we are subject to a substantial penalty, it could have a material adverse effect on our financial condition, results of operations, and cash flows.
+Added: If we are not in compliance with these laws and regulations or we are subject to a substantial penalty, it could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
State and local smoking restrictions have and may continue to negatively affect our business.
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Further, certain of our products and services depend on the ability to use non-public personal, financial transaction, and or other information relating to patrons, which we may collect and or obtain from travel service providers or other companies with whom we have substantial relationships.
−Removed: To the extent that we collect, control, or process such information, federal, state, provincial and foreign privacy laws and regulations, including without limitation the California Consumer Privacy Act (including the amended California Privacy Rights Act), the EU’s General Data Protection Regulation, Ontario, Canada’s Freedom of Information and Protection of Privacy Act, and Canada’s Personal Information Protection and Electronic Documents Act, require us to make disclosures regarding our privacy and information sharing practices, safeguard and protect the privacy of such information, and, in some cases, provide patrons the opportunity to “opt out” of the use of their information for certain purposes, any of which could limit our ability to leverage existing and future databases of information which could have a material adverse effect on our financial condition, results of operations, and cash flows.
+Added: To the extent that we collect, control, or process such information, federal, state, provincial and foreign privacy laws and regulations, including without limitation the California Consumer Privacy Act (including the amended California Privacy Rights Act), the EU’s General Data Protection Regulation, Ontario, Canada’s Freedom of Information and Protection of Privacy Act, and Canada’s Personal Information Protection and Electronic Documents Act, require us to make disclosures regarding our privacy and information sharing practices, safeguard and protect the privacy of such information, and, in some cases, provide patrons the opportunity to “opt out” of the use of their information for certain purposes, any of which could limit our ability to leverage existing and future databases of information which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
We must comply with federal, state, provincial, and foreign requirements regarding notice and consent to obtain, use, share, transmit and store such information, including providing the opportunity and mechanisms to “opt out” from certain uses in some jurisdictions.
−Removed: Furthermore, we may face conflicting obligations arising from the potential concurrent application of laws
−Removed: of multiple jurisdictions.
+Added: Furthermore, we may face conflicting obligations arising from the potential concurrent application of laws of multiple jurisdictions.
In the event that we are not able to reconcile such obligations, we may be required to change business practices or face liability or sanction.
To the extent that we fail to comply with applicable consumer protection and data privacy laws, we may become subject to actions by regulatory authorities and/or individuals (including private right of action in some jurisdictions), which may result in the payment of fines or the imposition of other monetary or non-monetary penalties.
−Removed: We are subject to environmental laws and potential exposure to environmental liabilities which could have an adverse effect on us.
+Added: We are subject to environmental laws and potential exposure to environmental liabilities.
We are subject to various federal, state, and local environmental laws and regulations that govern our operations, including emissions and discharges into the environment, and the handling and disposal of hazardous and non-hazardous substances and wastes.
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The extent of such potential conditions cannot be determined definitively.
−Removed: To date, none of these matters have had a material adverse effect on our financial condition, results of operations, and cash flows;
+Added: To date, none
+Added: of these matters have had a material adverse effect on our financial condition, results of operations, and cash flows;
however, there can be no assurance that such matters will not have such an effect in the future.
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The extent of such potential conditions cannot be determined definitely, and may result in additional expense in the event that additional or currently unknown conditions are detected.
−Removed: Material increases to our taxes or the adoption of new taxes or the authorization of new or increased forms of gaming could have a material adverse effect on our future financial results.
+Added: We may experience material increases to our taxes or the adoption of new taxes or the authorization of new or increased forms of gaming.
We believe that the prospect of generating incremental revenue is one of the primary reasons that jurisdictions permit or expand legalized gaming.
As a result, gaming companies are typically subject to revenue-based taxes and fees in addition to normal federal, state, provincial and local income taxes, and such taxes and fees are subject to increase at any time.
−Removed: We pay substantial taxes and fees with respect to our operations.
+Added: We pay substantial taxes and fees with respect to our operations, and changes to taxes and fees in our existing jurisdictions could have a material impact on our profitability.
From time-to-time, federal, state, provincial, and local legislators and officials have proposed changes in tax laws, or in the administration of such laws, affecting the gaming industry.
1 unchanged sentence
It is not possible to determine with certainty the likelihood of changes in such laws or in the administration of such laws.
−Removed: Such changes, if adopted, could have a material adverse effect on our financial condition, results of operations, and cash flows.
+Added: Such changes, if adopted, could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Available Information
4 unchanged sentences
Our filings are also available through a database maintained by the SEC at www.sec.gov.
−Removed: UNRESOLVED STAFF COMMENTS
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.