Eldorado Resorts' 2018 fourth quarter conference call. Joining us today from the company are Chief Executive Officer, Tom Reeg, and President and Chief Operating Officer, Anthony Carano. On today's call, we'll review the company's fourth quarter financial results and the ongoing success and progress against the company's key strategic priorities. We will open the call to participants for questions. This afternoon, Eldorado Resorts issued a press release announcing its fourth quarter financial results for the period ended December 31st, 2018. The release is now available in the investor relations section of the company's website at www.eldoradoresorts.com. Before we get started, I'd like to remind everyone that today's call is being recorded and a webcast replay will be available for 90 days, the details of which are in today's press release. During our call, we may make certain forward-looking statements about the company's performance.
Such forward-looking statements are not guarantees of future performance, and therefore, one should not place undue reliance on them. Forward-looking statements are also subject to the inherent risks and uncertainties that could cause actual results to differ materially from those expressed. For additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements, you should refer to the cautionary statements contained in our press release, as well as the risk factors contained in the company's filings with the Securities and Exchange Commission. Eldorado Resorts undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after the call. Also, during today's call, the company may discuss certain non-GAAP financial measures as defined by SEC Regulation G.
The GAAP financial measures most directly comparable to each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and in the comparable GAAP financial measure can be found on the company's website at www.eldoradoresorts.com by selecting the press release regarding the company's 2018 fourth quarter financial results. Thank you for your patience with that. At this time, it's my pleasure to turn the call over to the company's CEO, Tom Reeg. Tom?
Thanks, Joe. Good afternoon, everybody. Thanks for joining us on our call. I'm going to start with some overview remarks, turn it over to Anthony for property-level detail. Then I'll come back with a little more detail and whatever I forget the first time around. We're pleased to be reporting. This is our best quarter we've ever reported to you. Our EBITDA on a same-store basis was up 22% to $161 million. EBITDA margin expanded by 450 basis points during the quarter. It was really just a spectacular quarter all around. Broad-based strength across virtually the entire portfolio. I'd start by making a particular note about Atlantic City, which has been a subject of a lot of conversation with investors and analysts since we announced the Trop deal and certainly since we closed it. In the quarter, Atlantic City EBITDA almost doubled versus the prior year.
Since the openings of Hard Rock and Ocean on June 28th, Tropicana EBITDA through the end of January is up almost 7%. I know there's been a lot of concern about this is the latest market where what we're doing won't work. I think that the early results show you that we are doing something different. If you think about what else happened in the fourth quarter, we closed Trop on October 1st. We announced $40 million of synergies when we announced that deal. As we sit here today, we're pushing $30 million of run rate realized synergies. We still expect to hit our synergy target in the Trop acquisition in the middle of this year, and that will significantly exceed the target as we move forward. Elgin, we closed that acquisition in August, so this was our first full quarter of operation of Elgin.
It had a very strong quarter. We really didn't start touching the operations until November. Again, as we sit here today, we announced $15 million of synergies there. We're just about at $10 million run rate as we sit here today. We also expect we'll meet our synergy target there by the middle of the year, and we'll grow well beyond that. In the fourth quarter, we signed our second skin agreement with The Stars Group market access agreement, where we get a revenue share off of licenses they use, as well as shares in The Stars Group. Parent company, we opened our temporary sports book at the Trop in October. Our permanent book is set to open in the next couple of weeks before the NCAA tournament starts, we're excited about that.
Finally, after the fourth quarter ended, we announced that Bret Yunker will be joining us as CFO. I'm particularly excited that Bret is joining us. We worked together a very long time ago at Bank of America. Bret has been involved in every financing that Eldorado has done going back a long way, but going back at least to when we were a public company, and even the 2011 notes when we were still private. He has a wealth of industry contacts, experience, deal experience, a couple of decades as a senior banker in the gaming space and grew the JP Morgan platform to the market leader in the space. We're excited that he'll join us in May, that was a big deal for us as well. With that, I'll turn the specifics over to Anthony to come back afterward.
Thank you, Tom, and good afternoon to everyone on the call. I'd like to take a few minutes to provide you with some high-level operating perspective before Tom takes over to review the fourth quarter results in more detail. Looking at our operating segments, I'll start with the West, where adjusted EBITDA was up 19.8%, including a 21.2% same-store increase for our legacy properties against a 22.7% comparison in 2017. The property-level adjusted EBITDA margin rose 440 basis points to 25.2%. EBITDA for The ROW properties in Reno was up more than 30%, and Black Hawk continues to be a strong performer with an EBITDA margin of nearly 38% for the quarter. In Black Hawk, we expect to complete our room and casino renovations in the second quarter, which will position us to continue our strong performance as the Monarch Casino expansion is completed later this year.
We continue to expect the Monarch expansion to grow the overall Black Hawk market, and the upgrades to our properties will help us capture our fair share of the market growth. We also expect the Reno properties to continue to ramp as we're benefiting from the significant upgrades we've made across the three properties, an improving convention and conference calendar, and the tremendous overall economic growth taking place in Reno. We completed the renovation of the Circus Sky Tower and the Eldorado Suites in 2018, in addition to the opening of the spa, the Silver Legacy, and Ruth's Chris Steak House. In 2019, we'll focus on remodeling all the Silver Legacy hotel rooms. Turning to the East segment, adjusted EBITDA was up 46% year-over-year as the adjusted EBITDA margin rose 660 basis points to 21.7%.
Tom touched on the spectacular Atlantic City performance, but the rest of the segment was strong as well. Adjusted EBITDA at Scioto rose for the 16th consecutive quarter, with the last seven in a row at greater than 10% growth. Mount Airy also has some strong tailwinds now with the lifting of the smoking ban, as well as the opening of the sportsbook at the property, helping to drive adjusted EBITDA growth of over 50% at the property for the fourth quarter. In the Midwest region, adjusted EBITDA rose 19.7%, and the property level adjusted EBITDA margin rose 370 basis points to 35%, with all six properties generating year-over-year adjusted EBITDA growth, including double-digit growth at Bettendorf, Cape Girardeau, and Caruthersville, as we continue to implement our operating initiatives. Adjusted EBITDA for the South region was down 0.9% on a 5.7% decline in net revenue.
In Baton Rouge, we continue to feel the impact of the smoking ban that was implemented in the second quarter of 2018. In Lake Charles, the I-10 construction hurt our visitation in the quarter. This construction shifts in April, with traffic patterns becoming more favorable for us, so we expect we'll get back on track shortly there. 2018 was our first full year operating Lake Charles after the canceled sale, and even with the fourth quarter softness, EBITDA was up nearly 50%. Finally, for our Central segment, adjusted EBITDA rose 16.8%, with the property-level margin increasing 300 basis points to 27.1%. All three properties grew adjusted EBITDA, including double-digit growth at Elgin and Lumiere. In summary, our continued execution on analytical cost-cutting, synergies, margins, monetizing excess assets, and the expansion of sports wagering leaves us confident that 2019 will be another period of growth and record results for Eldorado.
I'd like to take a moment to acknowledge our team members across the entire company who bring a daily commitment to guest hospitality and operating efficiency that is the foundation of Eldorado's success. With that, I'll now turn the call over to Tom for detailed insights on the fourth quarter financial performance and additional details on our balance sheet and capital structure before we open up the call to Q&A. Tom?
In the fourth quarter, we ended with a revolver draw of around $245 million. Since the quarter ended, we closed on the Presque Isle sale in January. Those proceeds were used to pay down the revolver. The Lady Luck Casino Nemacolin sale is expected to close within this quarter, and those proceeds will come back for general corporate purposes as well. We got started on our share repurchase program in the fourth quarter. We bought a little less than 10 million shares at a little over $40 a share. Word on share repurchase, we've got a $150 million authorization that we've used a little less than $10 million. You should expect us to be a steady, modest buyer of our stock, and you shouldn't expect us to exhaust that share repurchase authorization until we're sub four times gross lease-adjusted leverage, which puts us into some point in the middle of 2020.
If you looked at this year so far, January was very strong for us, continuation of the fourth quarter. February, we've run into the same weather that everybody else has run into. January was strong enough to overcome that. Keep in mind that March is typically about 45% of the quarter. A lot of the quarter is to come. We feel good about the first quarter. We feel very good about the full year. The economic backdrop with unemployment rates low, job switching at 20-year highs, gas prices low, wages rising, real estate prices not increasing as quickly as they were, still increasing. Rates at absolute low levels, not at the lowest ever, still very low. Consumer confidence high. That's a pretty good backdrop for regional gaming.
We all should be doing well now, and I think you can see that we are, and we'd expect that to continue. At every moment of this quarter that hasn't had weather impact, the business has been very strong. If March comes in in a normal fashion, I wouldn't expect to be talking about weather on our first quarter call at all. I know there's going to be a lot of people that want to ask questions about articles they've read in the paper about us recently. We get the same newspaper as you do. We read those articles as well. We're not going to comment about any discussions we're having in the M&A universe. What I would tell you is we've created a great standalone path for us.
2019 or 2018 was about establishing a number of building blocks that will allow us to build value over a number of years. You've obviously got the two acquisitions that we closed late in the year. You've got the William Hill deal on sports. You've got The Stars Group deal on sports. You've got the Pompano JV that we entered into with The Cordish Companies, all of which should drive significant results for the current portfolio. As I said, we expect we'll exceed our synergy targets. We still feel like we can get this portfolio in excess of 30% EBITDA margins. We have a very good standalone path. That said, we think we're pretty good at this buying assets that other people are running and changing the way they're operated and driving EBITDA growth. I hope you agree based on the results that we've posted.
Just to refresh people on what has happened over the last several years. We bought MTR in 2014. That was the deal that brought us public. If you look at Scioto Downs on a current basis, the value of Scioto Downs alone is significantly in excess of what we paid for all of MTR. EBITDA at that property has grown over 70% since we took it over. That covers MTR by itself with some leftover. We sold Presque Isle, another piece of MTR, for just under $200 million in January, and we still own Mountaineer. That acquisition has been a home run for us. The next deal that we did was the Reno transaction. We bought the other half of Silver Legacy and Circus Circus.
If you run that forward to today, that acquisition was made for sub four times what we generate in EBITDA at the properties. That's been a very good acquisition for us. 2018 was the first full year that we operated the Isle properties. If you recall, when we took over Isle, they were doing about $200 million of EBITDA. Those same properties are doing in excess of $270 million of EBITDA now, and we're still going. We expect to reach at least $100 million in synergies in that deal. As you look at the landscape and you see assets or properties or companies where you think we can do a better job, you should assume we're analyzing the same things and we're looking to add as many as we can.
I don't want to talk about specific acquisitions, but we are going to remain active and you should expect us to remain active. With that, I'll turn it back to the operator for questions.
Thank you. At this time, if you do have a question, that will be star one. Again, star one for questions. We'll hear first today from Carlo Santarelli with Deutsche Bank.
Great. Thanks. Everybody, great quarter. Congratulations. Tom, fully appreciating your commentary on not speculating or commenting on M&A or rumored M&A, could I just kind of ask a bigger picture question, some of which I think you just addressed. When you think holistically about how you evaluate an acquisition, what you obviously can target in synergies, and then the underwriting from there, how does your math or risk tolerance change when you're looking at an OpCo situation versus a real estate inclusive entity?
Carlo, how you finance the transaction certainly goes into the calculation. The driving force in all of our acquisitions and all of our analysis of acquisitions is what we can do with the assets. If you can drive the cash flow improvements that we've been able to drive through these properties that we've acquired, you're going to make a lot of money, whether you finance them with lease financing or you finance them wholly owned on your balance sheet. As we look at acquisitions, we're going to look at where the capital markets are most favorable to us. We don't want to be a whole OpCo, but we will look at OpCo or REIT financing or real estate financing as a component of future deals. You shouldn't expect us to be doing anything that's outside of a deal-specific trade with our real estate.
Understood. Thank you. That's helpful. Then just quickly, obviously, your overall margins were tremendous. One of the stronger points within the departmental margins was obviously the casino segment, I think up over 320 basis points year-over-year. Roughly how much of that was kind of mix of the new acquisitions relative to just changes that you've made at the existing portfolio and some of the synergies that you're seeing on the casino floor from some of the stuff that you acquired previously?
Yeah, I would say in the fourth quarter, we really hadn't touched the new properties significantly. Elgin, we really didn't get into until November. The Trop, as you know, we typically observe for a little while before we make significant changes where we're always making some changes. It's a nice combination of both contributions from existing properties that we've owned for a while and the new stuff. When you drive increases like this, it's got to be broad-based. It can't be just a handful of properties. To give you an idea, we talked about our customer acquisition spend number last quarter that we said has historically been going down about 10% on an annual basis, as you know, that rolls up from bottoms-up programs that we're implementing at the individual property levels.
If you look back over fourth quarter, our customer acquisition spend was actually down about 12%, so a little better than what we have typically paced.
Great. Tom, thank you very much.
We'll hear next from Barry Jonas with SunTrust.
Hey, guys. Couple of questions. First, I'd like to delve more into your success in Atlantic City. I think the initial concern from some investors was that given this is more of a destination market, that cost and marketing discipline might not work the way some of your other successful deals have. Maybe just any color there would be helpful.
I think that we inherited a strong team in Atlantic City. Steve Callender's done a great job there. If you look back at the prior owner, Tropicana invested $200 million into that asset over the last three years, versus the market segment where we compete, you haven't seen that level of investment. The new entrants seem to target the high end of the business, basically targeting Borgata. We operate as kind of a mass market property in the market, and we've got kind of an island down at the south end of the boardwalk where we've got over 2,000 rooms filled with people that we're getting most of their wallet. It's all coming together very nicely there. I will tell you, Atlantic City has outperformed our wildest expectations.
We were expecting a hit from the new entrants, and it's been gratifying to see early on what we've been able to do with that asset.
Great. I would like to touch on the two Louisiana properties that you cited, Lake Charles and Baton Rouge. Clearly some near-term issues there, but curious how you see that resolving as the year goes on. You also have the opportunity to convert from riverboat to land. Just curious what the thinking there for both those properties is right now.
Lake Charles was a temporary impact from access issues due to road construction. As Anthony said, we're up almost 50% from when we took that back after the sale fell through. That one has been going very well. We would expect to be moving on a land-based conversion project there starting in the second half of this year. In Lake Charles, that project should be $75 million-$100 million, and we think we can get well in excess of a 15% cash-on-cash return. Baton Rouge is tougher. That's a tough location. We felt the smoking ban in West Virginia in 2015 and have seen what's happened there as it was removed. Smoking bans are difficult. We're working through. We've got another four months till we anniversary that.
We think we can do a better job on the cost side. We're analyzing whether or not we will move off of the boat and into the atrium there. There's certainly some advantages to that in terms of efficiency and customer friendliness, and we're analyzing that as we speak.
Great. Just a quick one. You gave a list of macro tailwinds that you're seeing this year. Curious about tax returns. Refunds appear to be coming out below expectations. Just curious if you're seeing anything there. Thanks.
I don't really have anything intelligent to say there. It's nothing that's impacting our businesses as we sit here today, positive or negative.
Understood. Thanks so much, guys.
Thanks, Barry.
From JP Morgan, we'll move to Daniel Politzer.
Hey, everyone. Good afternoon, and congrats on a great quarter.
Thanks, Dan.
There have been a lot of management changes over the past six months with you guys, and while you no doubt have an impressive track record of M&A, is it reasonable to think that the Fertitta management team should increase Eldorado's capabilities or ability for a larger and potentially more complex transaction? Similarly, should we expect corporate expense maybe ticks a bit higher than your recent levels, just given the changes in the C-suite? Thanks.
Yeah, Dan, the answer is yes to both. We feel very good about having our arms around our existing business and ability to tackle the next one as it comes online. As you know, we're not a highly centralized organization. We run these individual properties as individual P&Ls, and we provide a framework for how we want them to run, and we do quite a bit of analysis of how and who we're trying to bring into the properties. A lot of it's done at the local level, and I think you've seen that our approach is scalable. When we closed on MTR five years ago, we had seven properties, and we have 26 now, and I can certainly tell you we run a hell of a lot better now than we did then. We feel good about the ability to keep adding to this.
In terms of corporate expense, yes, corporate expense will run higher than it has run in the past. Again, when we closed MTR, excluding stock-based comp, we were running $25 million of corporate expense to run seven properties. At 26, we'll be somewhere in the 40s. We're not empire builders. We don't need a lot of guys to say, "Good morning, sir," on the way in. If you're not in the properties driving value, we really think about do we need you? The people that we have in our corporate division are driving value for the firm, and we look at that very closely.
All right. Thanks. That's helpful. Also, turning to Florida, I was hoping for an update in terms of Pompano. Do you guys still expect construction activity in 2019, and with potentially some parts of the development to open this year? How should we think about the timeline there? On a separate note in Florida, if there's any update on decoupling or what your lobbyists are saying recently, that'd be helpful as well.
We do feel good about significant construction activity in 2019. Pieces opening in 2019, that's debatable at this point. I just sat with Cordish yesterday and went through the master plan, and it's going to be spectacular. We're waiting on the resolution of this current legislative session. There's potential for decoupling legislation in Florida that we're monitoring. We should know the answer to that by April. At that point, we'll have a firmer sense of how much land can go into development immediately, and we should be back with much more detail on what's going to happen there.
All right. Thanks so much. Appreciate it.
Thanks, Dan.
We'll hear now from David Katz with Jefferies.
Hi. Good afternoon, sir.
Hi, David.
I wanted to just go back to Pompano for a minute and maybe focus on a couple of words that were in the release with respect to capital allocation. Do you expect that you'll be investing meaningful capital in that project, and where are the boundaries around that?
From a capital from our balance sheet perspective, I would expect it to be a capital-light model. I'm not expecting that there will be material significant contributions beyond the land that we've contributed to date. There could be some additional equity that would be kicked in. There's the opportunity to do a lot of this with third-party capital, or at worst, borrowing at the JV level. There's a high degree of interest from heavyweights in residential office development, retail, entertainment, and we feel very good about what we're putting together there. You're really building kind of a town center that surrounds the casino and you've seen it's basically a casino in the middle of a desert right now. We think it will drive significant incremental play through our casino.
To the extent we're investing significant dollars on balance sheet there, you should expect it to be earmarked toward expansions of the casino asset versus contributions to the real estate project.
Right. If I can ask one other capital allocation question. You talked about stock repurchases, which are always a topic of debate. If the goal is to get down under four times, why not do that first and then buy back stock? What is the philosophy around balancing those two avenues?
That's a good question. The number one priority outside of growth through continued M&A is debt repayment. As I said, you should expect us to be a modest, steady buyer of our stock. I think I proved again in the fourth quarter, I'm a poor short-term trader of stock. What did we buy it at 40, and it went as low as 33. We're really not trying to make a call on the stock or defend the stock. We do think a balanced approach where the bulk of our free cash flow is going to pay down debt with some return of capital in the absence of M&A is the right strategy for us today.
Got it. If I can sneak one more in there. I know that there's some new supply coming on in Reno over the next, whatever it is, near term, intermediate term. How are you thinking about those properties and any prospective impact on Reno? That's it for me. Thank you.
The last entrance in Northern California really just drew from Indian country and didn't impact. Graton opened with Station Casinos or Red Rock, and I want to say did north of $600 million of gaming revenue and had zero impact on Reno. That was really before Reno had taken off. We're certainly watching what's going on there. We're not anticipating significant impact on the Reno market.
Got it. Thank you very much. Nice quarter.
Thanks.
We'll hear next from Chad Beynon with Macquarie.
Hi, good afternoon. Thanks for taking my questions. Going back to M&A, I feel like during the past half dozen years, your success, particularly recently, has been on the cost synergy side. Now that you're generating a little short of $3 billion of revenues, I'm assuming that you have somewhere between two and four million customers in your database. Now when you think about acquisitions, do you think about revenue benefits there? Does that make you think about destination markets like Las Vegas any differently, or are you just focused on kind of the similar type of markets that you've looked at historically? Thanks.
We're always thinking of revenue. We just think about revenue different than the analytical community. We're looking to drive more revenue from our customers' pockets. We cannot be driving the improvements that we're driving unless our customer is spending more of their money and less of ours. If you look at what we're actually doing, we are growing actual revenue, not what's reported in the way gaming companies report their statistics. That's got to be the fastest pace of anybody in the space. Has to be. We're not making dramatic cuts in labor or service levels. In my opinion, this is an ancillary business that is unnecessary, this subsidization. You work for Macquarie, I assume the head office once in a while has a town hall meeting and they ask for your comments.
The next time they do, why don't you tell them you think you should turn one of the floors in N.Y. into a giant kitchen and just give away as much of the food as you can to anybody that's walking by in front of your offices. When you get the feedback from your peers about the brilliance of that idea, you don't even have to give credit to me. You take all the credit for that idea. The difference in our business is when I got here, that restaurant was already there. Everybody in the business said, "Well, you can't touch that restaurant or that giveaway or the free play that you're giving away." It is unnecessary.
There is probably some level that is necessary to drive some visitation, but I don't think even we are close to the end of this, and we're miles ahead of where everybody else is in that area.
Got you. Thanks, Tom. I think our kitchen subsidy actually comes out of my paycheck. Just to follow up on that, maybe I asked that poorly, but just to ask again, does the opportunity for a Vegas destination, because of your database, look any differently now versus when you had 10 or less properties just because of the hub and spoke.
Yeah, I mean.
The opportunity to send people there?
Yeah, I'm sorry I didn't come back to that one. There's value in the hub and spoke model. I think where you've seen operators struggle as they've tried to develop that, it's where they have a single Vegas asset. If you have a single Vegas asset, you've got some percentage of your database doesn't want to go there, whether it's very nice, middle of the road, or not very nice. Some piece of your database wants to stay somewhere else when they go to Vegas. The reason you purchased that asset is to drive your play there. What we've seen is it's not easy if you have a single asset. If you can cover multiple strata in your customer database, it starts to make more sense. That's really our thoughts on Vegas.
We don't have any burning desire to be in Vegas or in any market. We think that we see things in that market and in other markets where we can drive value, especially given our scale at this point.
Okay, perfect. For 2019, any commentary on cash tax estimates? I know this will change when you get some more NOLs after disposing of Nemacolin, just any kind of rough view to help us think about free cash flow for 2019.
Yeah, we don't have a lot of ability to shield remaining. We should be pretty close to statutory numbers. We've still got a $45 million tax payment that we collected in the closing of the Tropicana sale that covers state taxes that we have to pay. It's basically money we've held for that purpose.
Okay, thank you very much, congrats on the phenomenal fourth quarter.
Thanks, John.
For questions, that is star one at this time. We'll hear next from John DeCree with Union Gaming.
Hi, Tom. Just to build on that last question on free cash flow, can you remind us how you're thinking about CapEx for 2019? I think you've mentioned in your prepared remarks the room renovos in Black Hawk would be done, I think, 2Q. Any kind of meaningful projects that are underway this year that build into that CapEx number would be helpful.
Our budget is $200 million for this year. That's about 120-ish of maintenance. Significant projects that we've got ongoing are Reno. We're touching Silver Legacy rooms. We're doing a Topgolf Swing Suite this year. Those are kind of the major Reno projects. Black Hawk, we've got a room remodel and a casino refresh that should be done before the summer and before Monarch's competitive opening. Then the balance of the growth will be the beginning of the Lake Charles project. There's some smaller stuff in there, but that's the bulk of it.
Then beyond that, as you look across the portfolio, looking a little further ahead, would you expect consistent kind of growth or ROI CapEx in subsequent years? Are there other parts of the portfolio that you'd like to get to in due time, or revert closer back to just the maintenance number going forward?
In terms of what we can see, we've divided the Silver Legacy renovation into two years. You'll see CapEx in 2019 and 2020 around that. You've got the Lake Charles land base move. If we were to decide to do something in Baton Rouge, you would have that move. Beyond that, there's really nothing on the horizon project-wise. In particular in Reno, we're constantly analyzing the dollars that we've spent, and they've generated such high returns. We're constantly thinking about, is there something else we should be doing? There is nothing planned beyond completing the Silver Legacy room.
Got it. Thank you. One more to kind of pile into all the M&A questions. Maybe kind of seek parameters a little differently. I think in the past, you've kind of talked about assets that might be a little too small given your size and scale now. I think in the context of maybe divesting something at the right price, that you can see a path to a certain level of EBITDA. Two questions. One, is there still stuff in the portfolio that you'd consider moving at the right price? Then given what you can do with assets, are there still a group of assets that are probably just too small for you to consider at this point?
On the first question, I'd say I'll consider good offers on anything we own up to and including the entire company. In terms of what we're actively looking to sell, we're looking at assets, like you said, that just don't generate EBITDA to get enough attention from us, should naturally be owned by somebody else. As you might imagine, with Tropicana and Isle of Capri added to our portfolio, that bar to clear got a little bit higher. It seems to be a market where we might be able to get some stuff like that off.
Great. Helpful. Thanks for all the color, Tom.
Thanks, Sean.
From Telsey Advisory Group, we'll move to Brian Agnew.
Good afternoon. Good quarter, guys. I was just wondering from the results in Atlantic City you spoke of and the outlook there for improving operations going forward, would you give any examples of what you've done so far and some of the things you see as opportunities given there has been so much debate on that market?
What we do in large properties where your customers stay multiple nights, what we've got in Atlantic City and Reno is we're looking to optimize who is in the property when you know you're going to be full. In our experience, most of the operations that we've bought have not done a good job of that. Then when you know you're not going to be full, you need to optimize your cost structure and not chase business for the sake of activity. That's really the overarching philosophy in markets where your customer's going to stay for a couple nights. That's what we've started in Atlantic City, but we've really just started.
How about, I know you're fairly recently down there with the sportsbook, but I guess maybe what are you seeing in terms of who that's bringing to the casino thus far in there and West Virginia, and are you seeing more cash players? Are you able to see a way to monetize that longer term? Thanks.
Yeah. We're seeing new visitation, younger visitation, players that were not going to come to our property, just as you and I have talked for a long time about this. This is an amenity that the ability to offer it dropped in our lap where a customer will show up because something's on TV. That's pretty good for us. They're going to go to your restaurants and your bars and your gaming tables. That's what we're seeing in Atlantic City and New Jersey, and what we expect to see as additional states legalize. Sports betting is working exactly as we expected so far.
It helps if you have the TVs in the casino so people can watch.
Yeah, that's right. The beer.
Yeah. Apparently. All right. Thanks a lot. Good results, guys.
We'll move next to Daniel Adam with Instinet.
Hey, guys. Good afternoon.
Hey, Dan.
Just one quick question. We noticed that transaction costs in the quarter were a little elevated relative to where they've been trending, about $10 million versus I think $3 million to $4 million in Q2 and Q3. I guess, what do you expect for 2019? What is the true corporate expense? Because I noticed in the adjusted EBITDA number, you add back that transaction cost. What would you consider the true corporate expense total? Thanks.
I think the true corporate expense number is excluding stock comp in the mid-40s. In terms of transaction costs in the fourth quarter, we closed Trop during the fourth quarter, you should expect the bulk of the transaction cost to be captured in the quarter that you closed. I think you should be thinking about for the remainder of, or for 2019, you should be thinking of single-digit millions of dollars in terms of transaction expenses.
Perfect. Thanks, guys.
At this time, I'd like to turn things back to Tom Reeg for closing remarks.
Thanks for joining us, everybody. We'll talk to you again at the close of first quarter.
That does conclude today's conference. Again, thank you all for joining us.