Good day FRYS Membership,
Today’s membership memo is the first in FRYS’ fresh fiscal tax year, meaning charitable gambling performance resets with a new income statement. To recall, total sales of charitable gambling exceeded $1.9MM last year in just 10 months of activity, which means the 2022 – 2023 campaign should be on a pace to smash the $1.9MM mark – let’s begin.
September 2022 kicked off with a strong month of activity across the gaming spectrum. E-tab sales summed to $113K with a gross profit of $22K on a blistering 19.8% gross profit margin, which represents the second highest FRYS has achieved since commencing operations (19.94% in November 21). Turning to the tangible, paper tabs posted sales of $84K with a gross profit of $14K and margin at 17.2%. Bingo continues to draw customer activity as illustrated by sales of $13K, second most on record, with gross profits of $3K.
Net income for the month was a record $27K; however, this is misleading as the total includes starting cash of $14K for paper tab boxes that are needed to execute payouts / liquidity. Removing the starting cash yields a net profit of $13.2K - a solid showing.
Faribault Rotary Youth Services |
Charitable Gambling Operation |
Month | Operation | Revenue | Prizes | Gross Profit | Gross Margin % | Monthly Net Profit | Misc. Notes |
Sep-22 | E-Tabs | 112,995 | 90,667 | 22,328 | 19.76% | 26,935 | Strong net profit driven by starting cash of $13.6K ---> "True" net income = $13,284 |
Paper Tabs | 83,985 | 69,548 | 14,437 | 17.19% |
Non-Linked Bingo | 13,073 | 10,788 | 2,285 | 17.48% |
Linked Bingo | 931 | 791 | 140 | 15.05% |
Now with a decent amount of data / history established, one question that has pondered the mind is what of the major gaming (pull tabs / paper tabs / non-linked Bingo) reliably produces the most income per dollar of revenue for FRYS, meaning what game has the most reliable gross profit margin. Said differently, what game has the least amount of variability in terms of gross profit margin, which is the greatest factor in profitability. Understanding this dynamic will help forecasting and allow for better coordination with the Charitable Giving Committee as statistical models can be used to provide range estimates on cash flows available for donation. Enough chatter – let’s get to the numbers.
Game | Mean Gross Profit Margin | Standard Deviation | 1 Standard Deviation Range |
E – Tabs | 14.48% | 4.15% | 10.33% - 18.63% |
Paper Tabs | 17.89% | 2.58% | 15.25% - 20.41% |
Non-Linked Bingo | 26.70% | 6.92% | 19.73% - 33.63% |
Synthesizing the data above, unsurprisingly, paper tabs are the most consistent game month-over-month with a standard deviation of 2.58%. In plain English, with a 66% level of certainty, FRYS can presume that the gross profit margin on paper tabs will be between 10.33% and 18.63%, which is computed by taking the historical mean/average and then +/- the standard deviation. Testing that assumption, only three months out of 13 observations recorded a gross profit margin that was outside of the predicted 1 standard deviation range (21.57%, 21.08% and 12.18%) or 23% of the time.
Turning to other FRYS news, September featured the partnership between Faribault Youth Baseball Association & FRYS at the Town Ball State Tournament held at Bell Field. Per Brenda, activity was acceptable but nothing substantial, which is illustrated in the net profit of just over $1,500 for the Labor Day Weekend FRYS sold tabs. Per the agreement, FRYS split profits at a 50/50 share with Youth Baseball. After accounting for the boxes and labor, FRYS cut a check for $389 to Faribault Youth Baseball Association.
Lastly, prior communications had discussed the intent of the FRYS board to execute exterior renovations at the Rotary Camp; however, the contractor found himself too busy and was unable to complete the renovations this fall, which are now scheduled for this coming April / May.
The Charitable Gambling Team thanks you for your support as we build on the successes of year one and march into year two full speed ahead!
Chad
