- This month’s membership meeting is an important and highly informative report as it marks the completion of one year of charitable gambling as August 31 marked the end of FRYS' fiscal year
- FRYS’ charitable gambling revenues finished on a curious note as e-tab sales soared to a record high of $138K (monthly average = $92K) whereas paper tab sales were soft at $44K (monthly average = $58K).
- Unfortunately, profit probabilities did not play out in FRYS’ favor on either front. Although e-tabs had record sales, gross profits were a soft $12K due to the weakest gross profit margin experienced at 8.8% (prior monthly average = 14.5%).
- Likewise, paper tabs also underperformed with a monthly gross profit margin of 16.3% (prior monthly average = 17.9%) for a gross profit of $7K.
- Turning to Bingo, August set a record of activity with $15K in Bingo sales and gross profits of $2K for a gross profit margin of 14.8%, which was by far the worst performance for Bingo as gross profit margins had been averaging 28.0% à there were a couple sizeable Bingo jackpots that hit in August, driving profits lower.
- The prior month of July was strong with favorable profit margins, which resulted in elevated levels of profit-sharing FRYS recognized in the income statement for August as profit-sharing is paid in arrears à given the weaker margins observed over August combined with elevated profit-sharing, net income for August was in the red at -$2K.
- Included in the net loss was an organizational sales volume tax of $3.6K, which if removed, would have resulted in a positive net income for the month.
- Moving to aggregate financial performance of FRYS' first year in charitable gambling from October 2021 – August 2022 à over that timeframe, e-tab sales were $1.06 million with paper tab sales of $641K; E-tabs proved to be less favorable to FRYS, producing a gross profit margin of 14.0% while paper tabs came in at 18.4% however, even with the weaker gross profit margin, e-tabs produced more gross profit at $148K against paper tabs of $118K.
- Bingo, which is the newest operation as gaming has been taking place only since February, produced sales of $68K with a gross profit of 18K, making Bingo FRYS’ most profitable gaming experience with an impressive gross profit margin of 26.4%
- Total revenue from FRYS’ primary gaming activities of e-tabs, paper tabs, Bingo and electronic Bingo was a blistering $1.8 million à Moreover, net income (prior to any charitable gifts) for 11 months of gaming activity was $93K for a net profit margin of 5.24%.
- Of note, due to FRYS’ great success of $1.8 million in sales, the charitable gambling operation is subject to an audit since sales exceeded the audit threshold of $750K in revenue.
The Following Expenses were approved: - CG Made Easy Administrative Fee = $250
- Inventory = $6,000
- Softer sales in August along with purchases for the Town Ball tournament provide favorable inventory levels
- Rotary Gambling Team Compensation = $2,600
- Bingo Team Compensation = $2,500
- Bingo is being hosted every Thursday night à growing volume might translate to higher costs
- Revenue Share with M Peters = $10,000
- Profit share is 31% of e-tab gaming à Record sales in August that had poor margins, which is not always guaranteed
- City of Faribault = $1,200
- Revenue Share with Boxers = $8,000
- Profit-share w/ e-tabs = 15% & paper tabs = 20% à September brings football back for stronger volume levels at Boxers
- Misc. Cost = $2,000
- FRYS hired Reese, Winter payroll processing is ~$1k a month with another $1k for pursue bingo and/or other misc. costs that arrive
- Total Expenses = $32,550
- On a first by George Wickstrom & a second Laura Bock, FRYS’ membership approved October’s expenses
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