Accel Entertainment, Inc. (ACEL) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Accel Entertainment's 2021 Investor Day. I'm Matt Ellis, SVP of Corporate Strategy. And before we get started, I'd like to read a brief statement. Today's presentation is being recorded and will be available on our website under Events & Presentations within the Investor Relations section of our website. Some of the comments in today's call may constitute forward-looking statements within the meaning of the Private Securities Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties, including statements relating to Accel's proposed acquisition of Century Gaming, which will be discussed later in the presentation. This acquisition remains subject to customary closing and regulatory approvals, and any statements regarding the expected timing of closing, the ability to close and expected benefits of the acquisition are forward-looking. Actual results may differ materially from those discussed today, and the company undertakes no obligation to update these statements unless required by law. During the presentation, we may discuss certain non-GAAP financial measures. For reconciliations of the non-GAAP measures as well as other information regarding these measures, please refer to the appendix of today's presentation. So with that, I'd like to briefly talk about what will happen today. Andy Rubenstein and Michael Marino will get on and provide an introduction as well as talk about Georgia. We will then bring on Steve Arntzen of Century Gaming to talk to you about Century. We'll come back to Michael Marino and Ryan Hammer to talk about operational excellence, what we've been doing in Illinois. And then lastly, we'll kind of close with Andy and also talk about other states. At the end of the presentation, we will have a Q&A session. If you would like to ask a question, please use the feature on your screen and send it over, and we will do our best to answer everything at the end. With that, I'd like to turn this over to Michael Marino. Michael joined us as Chief Commercial Officer. Prior to being here, Michael was the SVP of Marketing as well as the Chief Experience Officer at Caesars, where he managed the end-to-end customer journey, including total rewards. Michael?

Thank you, Matt. I'm honored to be here today hosting the Investor Day. So as Matt said, I joined Accel last March from Caesars. At Caesars, I oversaw loyalty, digital customer journey and many aspects of the player relationship. And I always envied Accel from afar with how they were able to continually grow their business during times of relatively flat gaming across our various regions and our various locations. And I thought Accel represented truly the best opportunity in gaming, which is why I came onboard. Give you an overview of Accel today, we operate about 13,000 video gaming terminals in Illinois across almost 2,500 locations and partners. Our gaming revenue here has grown over 30% since -- going back all the way to 2014 every year, which, again, given what I had seen in my days at Caesars, was incredible to watch the growth here, as gaming growth in regional markets, in particular, and destination markets was relatively flat across most of our properties. And we tried to make our money on margin, in margin expansion, but we couldn't grow top line like Accel was able to do here. It was really a sight to behold. And one of the ways they do it is through contracted recurring revenue. Our partners here, we have 8-year contracts with our partners. We split the revenue with them 50-50 with the revenue partners after giving our portion to the state. And we have contract lengths on average of almost 7 years. And our partners really enjoy the service we provide and renew with us at almost 100% rate. So we have a very stable business here that will continue to grow. And as you can see on the bottom right, Andy will talk about this more, but when I joined back in March, we were operating in Illinois. Today, a year and 3 months later, we're operating in -- we will be operating in 4 states very soon with the acquisition of Century in Montana and Nevada and have a commitment to operate in Pennsylvania as well. So Accel to me represented the best blend of both a very stable core business that they had in Illinois and also a very strong platform that we could grow in many more states. So in Illinois, again, we're -- we currently are about a 30% market share in the state. And we have -- still have lots of room to grow in the state, you'll hear about that more later, as well as there were a lot of tailwinds from legislation back in 2019 with higher bet limits and more machines per location that we're starting to reap the benefit of as you see in our 2021 numbers. So again, very exciting core business with a lot of room for upside in Illinois alone. But what was really attractive about the opportunity was the fact that we only operated in Illinois, and there are 8 other states that allow distributed gaming today with other states discussing distributed gaming. And so as we looked to those other states, we looked at how we could get involved, and we have acquired a couple of companies in Georgia, Century and continue to look into other markets to expand into. And we have a playbook that we started in Illinois that we believe we can use in any jurisdiction to create a meaningful presence. And lastly, the most impressive part of Accel is the management team that runs the business. Andy, Derek and Brian, the 3 core members of the management team that have been here and really saw the business from a pure startup to the $1 billion business it is today, have been great to work with. Mike Pappas has over 40 years of experience in family business of route gaming and amusement. He was with a company that we acquired at Accel and has stayed on as one of our executive team members. And then Mark Phelan and Mathew Ellis; Mark runs Georgia for us, was -- has been Chief Revenue Officer, looking at other opportunities in other states. And most of you on the call know Matt, who's our Head of Corporate Strategy. And with that, I'd like to turn it over to our Founder and CEO, Andy Rubenstein.

Thank you, Michael. So as Michael mentioned, we've really had enormous growth in the short time since we went public in November '19. And we will be operating with the Century acquisition in 5 states by the end of the year. Our equipment has grown that we've placed in the field just in Illinois to -- in excess of 13,000 VGTs. And when we add Century, we'll be well in excess of 21,000. That opportunity will continue to grow. And you'll see the growth, like Michael said, in Illinois as well as additional states. The -- we recently raised our guidance on '21. We've had tremendous performance in the months that we've been operating in '21. So you'll -- the range has increased significantly. And we've had a really good first quarter. We finished up April with some strong numbers. And although May numbers aren't in, we expect them to be favorable. As you look at the last few months, the -- March was actually the highest revenue month in our history by a substantial margin. We've had significant same-store sales growth. Some of that can obviously be attributed to the addition of the 6 machine, the higher bet limits, the bigger jackpots. People are being introduced to our product that may not have experienced it before. And obviously, it's been a very favorable introduction because we've seen a lot of repeat new customers come to play. April followed on March with actually higher average daily revenue, even though the -- it was 1 day shorter. So the trend was very, very good throughout the spring. May followed on as even -- as weather got warmer, we still had a strong month of $65 million in revenue. So like I said, we've had a great year so far. The second half of the year should be equally strong. We have been working with Steve on preparing for the acquisition of -- and bringing Century in as a partner to the Accel family sometime later on, probably in the fourth quarter of 2021. And that will allow us to have a lot of different benefits to our current business and look at gaming in a different way as we expand to other states. Quickly on COVID. Illinois is open in terms of normal gaming hours. Restrictions, we still have certain health restrictions related to the restaurants and taverns. But as far as the operation, it's a normal operation. And indoor dining capacity is -- has increased to 75% of capacity as long as there's 6-foot spacing. So we -- all things are trending very well in Illinois, and we're looking forward to how things will develop as we move forward with Century. We've done a very good job in the past in our operations related to our acquisitions and integrating those companies. We have, in the past, brought on the relationship management function to our partner establishments. We've also -- have upgraded equipment, optimized the products that are in there to make sure the -- that they have the right products for their particular micro market. Our data analytics team has done a tremendous job utilizing the data that we have from our locations and then extrapolating that to those micro markets. We've been able to create a lot of efficiencies as we integrate those different routes that we've acquired. So we believe that we'll be able to continue that playbook, both in Illinois, Georgia as well as helping Century optimize their business but more help them develop into new markets in both Montana and Nevada. The Illinois market is still quite fragmented. There are a few big players, but then there's a lot of little players. And we're always evaluating opportunities to bring partners into the Accel family, and I think that will be the plan going forward. As you can look at -- on the chart, you can see that there has been a lot of improvement on those locations that we brought on with acquisitions throughout the years. And I think that will continue as we move forward. Moving on to Georgia. Georgia became a focus in 2020. There was an opportunity to enter that market, led by Mark Phelan, our Chief Revenue Officer, who relocated to the Atlanta area to lead that -- to lead our business in Georgia. We did an acquisition like -- of Tom's Amusement, as you are well aware, and it has allowed us to get into a market that we believe has significant opportunity. We bring a different type of company to that market. We're -- obviously, as a public company, we have been able to build confidence with a lot of the customers that are in that market or may have not been in the market before but are interested. And as you can see, the opportunity in terms of population and past revenue is quite significant. The Georgia pattern so far, for us, Bulldog Gaming was how we entered the market. And the Tom's Amusement acquisition provides both the COAM A and B in that market, so we are operating amusement games as well. More recently, we purchased Island Games, another strong operator that has good relationships in that market. Today, we're at in excess of 60 live locations. The expectation is that by year-end, we'll be well over 100 locations. Our backlog of contracts is significant. And the expectation is that Mark and his team will continue to grow that market going forward. As we were looking in late '19, we were looking at opportunities beyond Illinois. And there, again, Mark Phelan had spent a lot of time kind of evaluating where Accel should have additional growth, where the opportunities were. And he was able to reach out and talk with Steve Arntzen about their business in both Montana and Nevada. And through the course of many conversations and visits, we saw that Century gaming was the right type of partner that Accel looks for. And Steve and his team have built a tremendous business over the course of, call it, nearly 30 years of operation. Steve is a tremendous operator. His partners, Heidi and Merle, have each brought their talents to their organization. And they've built a business that is the leader in Montana and the #2 operator in the state of Nevada. Their diverse operations will; add a lot to Accel. And I want to introduce Steve to you and welcome him to the Accel family, and we are all looking forward to continue growing together. And I'll let him tell you a little bit more about what they've done and the excitement that -- why we are excited to have Century as part of the Accel family.

Thanks, Andy, and thank you, everyone, for the opportunity to talk a little bit about Century Gaming. Century Gaming is basically made up of 2 business segments. The first one and the most important and the largest, of course, is the route operations, which we operate under the trade name Century Gaming Technologies. The operations are in Montana and Nevada. We're headquartered in Montana. We're headquartered in Billings. And we have 10 service centers across the state. It's a big state. We cover it from edge to edge. In Nevada, our primary focus, of course, is Las Vegas, where the heavy concentration of the population is, but we also have offices in Reno and Elko. The other segment of our company is somewhat unique, and it's Grand Vision Gaming, and it is a Class II (sic) [ Class III ] video gaming manufacturer. It develops proprietary custom software for gaming machines, and it manufactures the devices. We'll start with Montana. We'll explain the route operation in Montana a little bit to you. Anyway, as Andy said, we're the largest operator in the state. As you look down the metrics, I'm not going to go through them all, but I'm going to point out one thing that probably catches some people's eyes as you compare them to other markets, is the average handle per video gaming machine per day is $1,369, which may seem a little light compared to some other markets. I think one thing we need to know in Montana is that Montana has a bet limit on its gaming machines at $2 and a maximum win per game of $800. So that's somewhat of a constraint. However, we've operated well within that constraint over time. In our state, it was established, we basically -- and I hate to even say how long I've been in this, as Andy pointed out, but 34 years ago is when I got into gaming in Montana. And 2 years after that, statewide, we established gaming laws across the state. One of the things we established at that time is the state gaming share would be 15%. We have held that same standard across our industry with the state of Montana from day 1. Our state gaming tax rate is still 15%, and we anticipate it to remain there. Another clearly differential -- difference in our operations in Montana and Nevada over the other 2 markets that are in front of us, Illinois and Georgia, is that all of our vending splits are not legislated. The vending splits are the traditional, individually negotiated contracts with our location. So when we go out to a location and we work with a location, it's not a 50-50 split because in those other markets, we've had to learn how to negotiate and individualize each contract with our customer base. One other item to point out in Montana is we operate nearly 6,000 games with only 109 employees, which we're really proud of. We turn to Nevada on the next slide. And we see that, again, we have a good concentration in Nevada, considerably higher average handle per day on the gaming machines, which is the credits that are played on the game, all the bets that are played because it's obvious that Nevada has no bet limits. We operate in Nevada in primarily what's called the restricted licenses, which means there are typically 15 machines or less. And in that marketplace, the state and local government share is not based on a percentage of win in the gaming machines like the other 3 markets we've discussed. It is completely different, and it's based on fixed payments to the state governments, payments that are made annually and quarterly, sometimes even monthly. So it depends on which jurisdiction you're in as to which your state share is, but it's all in the restricted area. It's not on a percentage basis, but it's fixed fee. Again, in Nevada, our vending splits are negotiated with individual licensed locations, and they vary, of course, considerably across the state, according to whichever customer we're dealing with. Next slide, please. Okay. One of the reasons we changed and started with the trade name -- went from Century Gaming to Century Gaming Technologies, and that was several years ago, is that our focus on technology and communication systems with the gaming machines. We have the Gamblers Bonus program in Nevada, which has over 100,000 current players in this database. They could log in any particular day. We have the logo shown on this slide of 25 years, which, in 2020, we hit 25 years. This program actually started in 1995 and was way out in front of its class. We have, of course, refined it considerably over 25 years, but we're really proud of Gamblers Bonus and what it does in the state. One of the features that it had from day 1 is it was a cardless system, so it was completely unique. You didn't have to have a card. All you needed was a player ID and an individualized PIN that you input into the touchscreen on the gaming machine to be able to log in. Another key feature with Gamblers Bonus that's unique is that it -- you have an individualized player account, where you can take that account, and one of the features is this Four of a Kind Bingo Award, where you try to get 13 different Four of a Kinds in your poker hand. You actually carry that account anywhere in the state of Nevada that has Gamblers Bonus on it. So any of our locations that are Gamblers Bonus, you can walk in and you can play, and your account stays with you. So 2 key things there, and we're also awful proud of having over $1 billion in annual logged-in play by our players. So it shows the popularity of that system. Grand Vision Gaming. We turn over to Grand Vision, and we flipped the page quite a bit. Grand Vision is a true Class III gaming machine manufacturer. We started Grand Vision Gaming in 2008 when we felt that the market in Montana was getting mature enough that most of the major manufacturers had turned their vision somewhere else, and they had started to look at other markets. They thought Montana was probably saturated with games at about 15,000 games. And we were having trouble getting new content. Well, we certainly, as the largest operator in the state, did not want to have our players start moving away or fall out of favor with gaming. So we literally started this company from scratch to help our own route. And then of course, we knew that with the investment we've had in it, we couldn't justify that if we didn't sell to others. So we built specific games for the market. And Montana is a primarily, believe it or not, a keno market. And that happened because when gaming first started in Montana, keno had an $800 payout and poker had $100, and those were the only 2 games allowed. So you can imagine, the players wanted to play the game that would pay you $800. So that's how keno started in Montana. So we started building keno games that were really unique and played more like slot games. We took that product, and we were successful in Montana. We took it out into other similar, what they call, VLT-style markets, which are the ones that we basically deal in, in both Illinois, Georgia and Montana, South Dakota, West Virginia and Louisiana. We took this product out, and we saw that not only did it give us a lift in our own locations, but it provided us a way to kind of justify the manufacturer and certify it because we were selling these games out to other people also, and the customer was attracted to the game. So we've put almost 9,000 games out since then across these markets. Our biggest market is Montana with almost 4,000 games. Century does own 1,400 of those games in Montana and Nevada. How Nevada comes in is Grand Vision is not licensed in Nevada. However, Century, as a manufacturer, is. And so Grand Vision contracts with Century to bring in the product manufactured under Century's license in Nevada, and they do all the software development. The hardware manufacturing is -- in Nevada is actually done in Nevada by Century. One other key point on here is we have over 92 proprietary game titles that we've built ourselves from scratch, all new math models, all new assets of art, sound, whatever. And then we also have 34 licensed game titles, and we have done an awful lot of development with some of the biggest manufacturers in the world, i.e., one of them which we have done 19 titles with is ARISTOCRAT. And we are able to convert their games onto our platform in the slot versions. Also, we've been able to convert those into keno games and get a double pop off of their product. So we've done it both ways. Next slide. When Andy and his team had a number of conversations with us, one of the things that I was always looking for in our longer-term strategy was a company that wanted to grow with us and not acquire us and swallow us. Accel, I thought, fit that definition almost perfectly. The territory expansion and moving into more legacy traditional route markets, I thought, was good for them. The technology background and experience that we bring to the table, I think, will -- we can use that across the entire platform. And of course, the VGM manufacturing was something else that I thought was important that we could contribute that's unique. On the flip side, the sales strategy and what Accel has been able to do in Illinois was extremely attractive to me. I'm a operations guy. I have no problem trying to hit a budget in whatever, but I do it on controlling expenses and hoping that my sales will continue to grow, but I really have to focus on expenses, and where Accel, in my opinion, has done such a good job of driving revenue, and I was really -- thought that they could probably help us in that regard. One thing that has happened over the years is Century -- we acquired United Coin in Nevada. When we moved into Nevada, we acquired United Coin in 2004. And we had a pretty hefty capital investment there, most of it in debt. 2004, Nevada was flying high, growing like crazy. '05 was a great year. '06 started, all of a sudden we ran into some problems. And the whole economy kind of collapsed in years 2007 through 2010. Most of the competitor in our field in Nevada suffered to the point where a lot of them restructured. We didn't do that. We continued to work through it, but we continued to drag a pretty heavy legacy debt load with us. This is going to all change, of course, when we're able to get the approvals to do the Accel transaction. But one positive result that happened in that is our operations are about as efficiently streamlined as you can possibly get, and I'm proud of them because the service level is very high. So we take the best practices of both companies, and we mix our efficiencies with Accel's growth playbook. And I do truly think, at one point down the road here very soon, we're going to be the best-in-class VGM operator in the U.S.

Steve, thank you very much for the overview. I just wanted to clarify one thing. Century does manufacture Class III games, correct?

Class III, all Class III.

Okay. Perfect. Thank you. Thank you for the overview. Very exciting. And again, welcome to the family. Hopefully, soon, we'll be able to do that formally. So our next presenter also joined from Caesars. Ryan and I -- Ryan Hammer and I work together a lot. And we actually met Andy in the room that we are sitting in right now back in 2017. And when we were talking about a potential partnership with Caesars and Accel back then, I was here to talk about player rewards, loyalty, player tracking and whether there was a play to share customers between the 2 companies. And Ryan was here to talk operations and mainly represent the fact that we had some good local hoops talent from the southern part of the state. So with that, I'll turn it over to Ryan.

Thank you, Michael, and thank you to everyone for taking time to listen to our story today. I believe we have a great growth story, and that's why I joined the company over a year ago. I've been in the industry since 2002, and I was a graduate student, had a summer internship. And I fell in love with the gaming industry and wanted to stick with it and was very fortunate to work for Caesars Entertainment after I got done with school, for over 16 years up until last year when I joined the team here and really had a broad experience that I, hopefully, bring to the table to help us grow. So I was able to work all over the U.S. in different markets from very regional, local markets to hybrid markets like Atlantic City all the way up to Las Vegas destination, where you're dealing with everything and all kinds of macro events and different verticals in the business. When this opportunity to join Accel came my way, it almost seemed too good to be true. Michael and I have been slugging it out on the strip with very, very single-digit growth rates and really focusing on expenses and margin improvement kind of like Steve Arntzen talked about as the #1 focus of our business, tons of debt. Everything was going toward paying down debt and didn't even have the flexibility to go out and pursue a lot of smart growth projects. So when this came, just looking at the financials and what you can see online, to have a company with explosive growth, very little debt, it obviously warranted a better look. And then when I had the chance to meet Andy and the management team here and then Karl on the Board, I quickly understood that behind all those great financials, there was a culture that I knew would be successful in helping us grow and how we treat our employees that was sustainable and that could allow us to grow. So it's been a great start. Obviously, the pandemic threw a little wrench into the plans. I called it a redshirt year last year, with starting and stopping and all that. But very excited to be here and help us grow in Illinois and beyond. Andy touched on our operational approach a little bit, but just to highlight -- reinforce some of that and where we want to go in other states as well, we really view every opportunity that we have as a partnership, and you hear all of our speakers use the word partner. And that's really central to what we do. Steve talked about it with the M&A process. We're not looking to come in and find synergies on day 1. That's not what we're trying to do. We're trying to add our strengths to shore up some of the other things so we can help other companies and vice versa. We know there's a lot we can learn and utilize their strengths in other markets where we're not as familiar. So it's a partnership, whether it's in the M&A process or with all of our locations in Illinois to help grow and to help drive future business and have success together. Obviously, we're trying to pursue growth. We're in the early innings of this game, and our focus is on top line growth and doing so in an intelligent way. We try to do that through making sure we invest in the right products, making sure we have the latest software upgrades for our games, buying the newest products, staying very close to all the manufacturers, service all over the state of Illinois and other states when we get there. We have regional offices, technicians located all over to make sure that we can get to those locations, almost similar to a logistics business where we can provide wonderful service. And lastly, just from an analytical piece, we want to make sure we have enough of a sample now to understand what games should go in the right places, studying each market to understand what goes well together, looking at the entire map almost like the electoral map to understand where do we need to be better served, where can we lead our sales team into other areas to pursue profitable growth. We devote a lot of resources. I think this has been one of the key tenets to our company's success over the years, especially as a smaller company, where it's tough to make these investments, but on the sales side and on the relationship management side, and we'll continue to do so going forward. On the sales side, we have a regional structure in Illinois. We have 4 different markets, regional locations. We have a sales team in each area that goes out on the street and tries to find new locations, tries to make sure the word is out there, tries to get the word out on video gaming, which is still relatively infant, less than a decade old in Illinois. So there are still some areas, some entrepreneurs that don't know about video gaming. So we're always trying to get that word out there and trying to incentivize our team to be really smart and find locations that are profitable, that will be successful for us going forward, and we can have long-term relationships with. Once we get that sale and that agreement, we quickly pass that over both to our in-house team, where we've invested a lot in to get the processing done and to make sure our sales team can focus on being out in the street; and also to our relationship management team, which covers the entire state, really focuses on same-store sales, focuses on making sure each location has an intelligent marketing program, promotions program that works for that market. So we're not just one size fits all for 2,500 locations, we really try to localize this and make sure that we're being smart, understand the competitive nature in each market and trying to listen and grow with each of our partners using Salesforce and other tools to make sure we have the right feedback and the right communication loop with all of our partners regularly to make sure that we can help grow the business going forward. So we'll flip ahead and think about what Illinois looked like more recently. It's obviously been, coming out of the pandemic, a very strong story. The pie in Illinois is getting bigger, and our share of that pie is getting larger. So we're happy with that. It all starts with new licenses. So the Gaming Board historically met 10 times a year. During the pandemic, it's been reduced. I think we had 7 meetings last year. There are 8 on the calendar this year. So year-to-date, we've had 3 Illinois Gaming Board meetings so far. And as you can see, there have been 266 new licenses given away at those meetings. We've had a very strong performance so far, earning 38% of those or over 100 already. So there are 5 other meetings throughout the rest of the year, including 1 next week, and we'll continue to work both on the sales side and on the processing side to make sure we have our fair share and then some. That's really what drives the new location openings and then correlated to ultimately VGT growth. So you can see over the last 5 years, our compound growth rates have outkicked the rest of the market, growing 19% and the VGT growth going from less than 5,000 VGTs in 2016 to approaching 13,000 as we roll into this post-pandemic period in 2021. So strong growth overall in Illinois. And more importantly, we see more growth in Illinois as we look ahead to the future. So when we think about what the total addressable market can be in Illinois, again, right now, from a location perspective, as we noted, there are 7,500 locations in the state of Illinois. Just by going out and addressing markets that have already opted in, townships and municipalities, we believe that number can double in the near term to get all those areas, all those licenses that are being approved at each meeting, 100 at a time. That's what we're focusing on right now, to go out. Some markets, some townships may be newer to video gaming, so it's just a matter of getting up to speed. They may only allow fraternals at this point, but they have an avenue to grow into other phases of the business, trying to find other larger truck stops and all that, that goes with our areas that we can go after right now. That's a huge focus of our company. Beyond that, in the future, as regulations and as other municipalities opt in, we see continued growth. Obviously, Chicago would be the mother ship in the state of Illinois being, by far, the most populous area. And beyond that, a lot of other townships along Chicago, a lot of the suburbs near to Chicago, some of those near St. Louis who have yet to opt in. Again, we think the number of locations over the course of time will triple if all these regulations pass. And you think about it from a saturation point of view as well. We look at this from how Illinois is right now compared to other states that offer route gaming. Right now when you look at how many -- what the population is per VGT, we're not really that dense compared to the other states, 326. If we just break down that and get closer to how some of these other states are, it allows an addressable market closer to $4 billion, and we believe that will happen over time if Chicago and some of these other townships opt into Illinois. Just to take recent numbers, as I wrap here and pass it back to Michael, in March, the video gaming revenue in Illinois was $247 million. So obviously, that was a lot of pent-up demand and a lot of people coming back. But that run rate alone gets us close to just under $3 billion without anything else today. So there's growth in Illinois, and we are well positioned to capitalize on that. Michael is going to talk just a little bit more about some of our recent trends.

Thank you, Ryan. And as Ryan talked about, we've grown substantially in Illinois in locations and VGTs, which you see on the left-hand side of the slide. But the other thing that Accel has been able to do over time is actually get more revenue out of our locations. And you can see the hold per day per location has continually gone up as we've added locations, which, again, is very hard to do normally. And in 2021, you can see the result of the new legislation on 6 VGT, higher bet limit software has created a new normal in our industry that not only we are seeing but our competitors are also seeing. And we believe that this new location win per day will hold moving forward, and we're very excited about the prospects there. And the way we've done it, that's what I want to talk to you about, and there's a couple of different paths that we take. One, we've created an analytics department here that actually uses data to drive better performance. And so the way that we've done that, well, a couple of things, is with our scale. We're able to actually negotiate volume discounts with all of our suppliers. So we can get machines at the best rates possible. And then given what we know about having 2,400 locations and analyzing all the data on all those locations, we know what types of machines perform best in what types of locations. So certain machines perform better in bars than they do in fraternal. Certain machine performs better in parlors than they do in restaurants. And so we know the optimal set of 6 machines to put in any given location. We can get those machines at the best price so we can put the best possible machines in those locations, which ultimately drives more revenue for us out of -- or better return on capital for us on those machines and more revenue for our partners. And then on top of that, again, all of that's true. And then we can also -- we are able to purchase refurbished machines, and we have an in-house repair shop. I mean, I think, Ryan mentioned this as logistics business. We have an in-house repair shop that actually can make those machines look like new machines. So another thing we are able to do is we're actually able to take on locations that otherwise some of our competitors just can't because they can't turn a profit on them. I remember my very first job. I was at Capital One, and Capital One made a living on providing credit to people who otherwise couldn't get credit through the major credit providers just by being smarter at the time of how they used analytics to understand the risk levels of those people to make sure that they could get a card in their hands. And we do kind of the same thing with location partners. We are able to find locations that we believe would be a mid-level performer and can actually service those locations and make it very profitable for us where many of our competitors can't. Moving to the next slide. The other thing that we've done is we've tried to be a leader for player marketing, and we do this in a lot of different ways. So in Illinois, we're not able to do player tracking. So it's not like the casinos, where you can -- each player has a login, we know exactly how much they play. So we've had to be a little creative about this. But we do use very similar things to what we used in my Caesars days. We use multichannel marketing. We use social media. We use e-mail. We use direct mail. We do create a database of players through sweepstakes, where we have a tablet system in most of our locations. Players come in and want to be -- want to engage in the sweepstakes. You can see the cup I have here from Mind Blowing Giveaway. It was one of our sweepstakes recently, where we gave away $1 million in total to players across the state. And we use those sweepstakes to gain information on our customers, to know who they are, know where they're playing and to be able to communicate with them and explain to them when we have other things going on that would make them prefer one of our locations versus one of our peers. We've created partnerships. Again, our scale provides us the ability to get into partnerships with other types of gaming establishments that otherwise are appealing to customers when they're not playing with us. And so we're trying to expand on all of those items and communicate our message and the value that we can provide to the player. And one of the ways that we're -- we've changed to do this recently is we did launch a player rewards program here on March 1. Again, it has nothing to do with player tracking specifically. We don't reward the player directly for their play. But what it does is it's a check-in system that rewards you for frequency to the establishment because we know that the more we drive players to the establishment, the better revenue the establishment gets not just on gaming but on everything else. The better the establishment does, the better we will end up doing on the gaming side. So we reward players for their frequency, and we'll continue to expand on that loyalty program as we move forward. And so building on that, in my -- one of the things I mentioned earlier about was how envious I was of Accel back in my Caesars days. So at Caesars, if you were in Vegas, where Ryan managed properties at the end, he would see people, at best, 6 times a year. If you're in more of a regional casino, where you're a 3-, 4-hour drive, at best, you're seeing people once or twice a month. And then on frequency casinos, if you're local, right down the street, if you're within an hour's drive, you could see them 3, 4 times a week. We see our customers, many of them, every single day, right? So we are the primary relationship to our customers. We're basically their convenience store for gaming in a lot of ways. So if they're going to game for an hour, we're their choice. If they're going to game for 2 hours, we're still probably their choice. If they want to game for an entire day, they may take time to make the drive to go to a casino, but we are their primary relationship. And we want to expand on that, and we want to deepen that relationship through partnerships. And we know that our players want to do other things. At Caesars, they wanted to go on cruises. They wanted to go to Atlanta. They wanted to go to other markets. We understand that. And so what we want to do is be able to facilitate that and allow our customers that when they're not gambling with us but they want another avenue to gamble, we want to be able to partner and provide that opportunity for those customers and really own that relationship but allow the player to feel like they're getting more from their Accel relationship. And one of the ways we'll do that is through our Player Rewards program. One of the things Steve talked about, and we're excited about the Century business, is he's run Gamblers Bonus, loyalty and distributed gaming for a very long time. I ran Caesars Player Rewards -- Total Rewards and Caesars Rewards for 8 years out there. So I understand the casino side of things. He understands the distributed side of things. We believe that putting these together, we'll be able to create a very strong player rewards program in Illinois whenever that comes to fruition in terms of the normal player tracking mechanism. And until that comes to fruition, we'll be able to create something that's very strong and very appealing for players through AE Player Rewards that we have today. So moving on to the last topic we wanted to talk to you about is just -- we talked a lot about where we are. We wanted to talk to you about where we also could be. So we move to other states. There are 4 other states that do distributed gaming today in a regulated fashion. And we look every day at evaluating options for how we can enter different states in a financially attractive way. There's also 3 states that have legislation either -- legislation is either still pending or has been closed. They would be very big states for us to operate in should any of these get over the line. And in Pennsylvania, Missouri and Virginia, very -- you can read on the slide, there's various states of where these are, but all 3 have a very realistic chance of being legalized in the near future. And we believe, going back to the beginning of the presentation, the playbook that we ran in Illinois would work in all 3 of these states. Pennsylvania -- all 3 of the states actually look very similar to Illinois did when Andy started the business here in Illinois. And so we're very optimistic if any of those 3 states or all of those 3 states legalize gaming in a regulated way. We could be a major player in all those states. And so moving to the last slide for me. It just shows -- just wanted to kind of give you guys a sense of what the total opportunity is in this business. Ryan talked to you about the Illinois opportunity, which we've pegged here as there's a $4 billion revenue opportunity there. Frankly, with what we've seen in the last 4 months and the impact of the higher bet limits and additional machines, if that holds like we're seeing now, that $4 billion, frankly, could be even higher. In existing markets, all existing markets today, we believe those markets could grow to $10 billion of total revenue, and we have a very small portion of that today. We believe we could be a meaningful player again across the board in those markets. And then new markets -- just to give you a sense of what could be on the horizon, new markets here looks at any place that actually has a lot of casino gaming that, obviously, is open to the idea of gaming and could operate commercial -- could operate distributed gaming as well. The upside is tremendous if any of those states that do commercial gaming would opt in. So we're guiding to $700 million of revenue today, which, given the total TAM that you could see here over the next 3, 4, 5 years, is pretty low considering the opportunity of where we can -- where we believe that we could be. And with that, I'll transition back to Andy to close, but I will say before I give to Andy, [Operator Instructions] as Andy will take them once he's completed his closing.

Thank you, Michael. So as we've demonstrated today, there are lots of opportunities for Accel to grow. And in an industry where we are relatively asset light, we can grow quickly. We -- as a business, we're -- our leverage is low. So we can use the capital pretty efficiently in that growth. And both organically and through acquisitions, we'll continue to be able to expand our footprint. We are, as Michael mentioned, exploring other opportunities in other states. And we have the depth and the breadth of our management team to be able to accomplish that. And as we've demonstrated in Georgia, our Chief Revenue Officer took on that opportunity. Mark moved there. He's building that market. He helped us identify the Century partnership. There's lots more of those that are on the horizon. And I think you'll see the opportunity for Accel to continue to expand both in Illinois and, more significantly, throughout the United States happening in the next couple of years. And the -- if you look at Accel's future growth, this year, we'll be between $117 million and $127 million on EBITDA guidance that we've provided. That will expand significantly as we annualize some of the changes that we've made this year, Century joining us toward the end of the year. We will continue with the organic growth as well as M&A. And as Michael mentioned, there is opportunities in many states that -- where legislation could pass. So the -- we're in the beginning of Accel's growth as a public company. We've only been public now for about 18 months. It's really exciting to see where the opportunities are. A lot of opportunities have opened up to us since we are a public company. And I think you will be rewarded in partnering with Accel as we continue to grow. So we'd like to open it up to questions. We've had a few that have come in, and we'll try to answer the questions as they've come in.

So the first question from -- that we have is about the behavior since the properties have reopened. I'll let Michael answer this question.