- Charitable gambling profits for the month were a robust $13.2K, driven by the annual Rotary Raffle that yielded a gross profit of $13.4K (raffle ticket sales = $18.4K)
- The inclusion of the Rotary Raffle in June’s financial performance was overlooked in prior notices when a negative net income was anticipated for July
- Turning to the primary function of the charitable gambling operation of pull-tab sales, total pull-tab revenue turned in a surprising $166K in June compared to $145K in May for an increase of 14% month-over-month
- This growth in sales halts a three-month trend of declining sales activity going back to March
- While sales surprised on the upside, luck was not on FRYS’ side as the gross profit margin on e-tabs hit a record low of 9.7% for the month compared to the historical average margin of 15.1%
- To put that into dollars, e-tab gross profit for the month was $9K
- If performance was average for the month, gross profit would have been around $14K on e-tabs, so a couple percentage points of gross margin loss make a sizeable difference
- Unfortunately, paper tabs also ran well-below historical trend with a gross profit margin of 15.7% compared to the historical average of 17.9%
- The following expenses were approved for the month:
- CG Made Easy Administrative Fee = $250
- Inventory = $8,000
- Opportunity to purchase more inventory on hand for MN Town Ball State Tournament
- Rotary Gambling Team Compensation = $2,600
- Bingo Team Compensation = $2,000
- Bingo is being hosted every Thursday night
- Revenue Share with MPeters = $9,500
- Profit share is 31% of e-tab gaming à Surprise in pull-tab sales in June might be a harbinger of potential increased economic activity
- City of Faribault = $1,200
- Rise in sales in June could mean more profit share with the city
- Revenue Share with Boxers = $7,000
- Profit-share w/ e-tabs = 15% & paper tabs = 20% à Revenue up in June means potential for higher sharing with Boxers
- Misc. Cost = $2,000
- FRYS is hiring Reece, 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 Rod Muller & a second Dr. Richard Huston, FRYS’ membership approved August’s expenses
- In other FRYS news, a general contractor for the Rotary Camp has been located and will be able to complete some of the camp repairs prior to FRYS’ fiscal year-end of August 31
- The first set of repairs, focusing on external projects, is the smaller of the two in terms of costs but more pressing from a safety standpoint (~$2k)
- Some might ask why the fiscal year-end of August 31 is important à Due to tax law, FRYS is subject to unearned business income tax (UBIT) on profits that exceed $1,000 and are not donated back to the community
- Per Mr. Dave Beranek’s understanding, FRYS is going to be hit with some level of UBIT this year due to this being the first year of charitable gambling as startup funds to get the operation up and running are subject to the tax
- The last update pertains to FRYS’ partnership with Faribault Baseball Association to sell pull-tabs at the MN Town Ball State Tournament: FRYS is scheduled to sell pull-tabs over the long Labor Day weekend, come watch some great baseball and play some pull-tabs!
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