Even cynical me didn’t quite appreciate this until Dave pointed this out earlier in the year…. Even with it’s best week ever I really wonder if they are making money on an annual basis, or even if they would be cash flow positive for the year at this rate. Can we work it out?
To start with... at $2.18 mil/week, they would bring in $113 mil/year. FYI, their average since opening has been well well below that, but let's start out optimistic and I'm too lazy to figure out the cumulative average anyway.
But what are their costs they must have? Here are a bunch of SWAG’s and I’ll gladly take refinements from the peanut gallery. This is mostly all net of taxes paid so other than for an adjustment to account for the guaranteed $10mil to the city annually the other taxes are accounted for by starting with their net from the machines. Anyway…..
So some annual costs we know about:
Bond payments: $50-60 mil
Payments to the SEA to pay for the arena: $7.5 mil
Property Tax Bill(s): $6 mil
Adjustment to make up for guaranteed tax revenues to the city: $0-5 mil
Total compensation costs for 1000+ workers with benefits: $40-50 mil
Other operating costs? Not limited to utilities, maintenance, other CBA costs, etc: ??
That right there, with nothing at all under ‘other’ comes to $97.5-128 mil/year. Most assumptions are pretty set or conservative except possibly the compensation costs for the workers. So they are probably on the low end of that I suspect which would be another topic for another day. Do the incidental operations like the restaurants at the casino make money or not I dunno?
Nonetheless, with their ‘best week ever’ it’s pretty tight at best. Add in just a few costs under ‘other’ and it’s hard to see them making money at all. I do wonder what their utility bill is there along the river. Like I said… all a big SWAG (that’s a technical term)… look for Dave to work this out more precisely.
Oh yeah, even with their 'best week ever'… tax payments to each of city and county amount to $5mil/year which is a bit less than the $10mil anticipated.
Of course, the counterargument is that they could do much better in the future. Table games and all have become the industry’s savior and all. Certainly a possibility. My most positive argument for them would be to wait and see what spring and summer bring in. The question then becomes that given that they lose 50-60% off the top in taxes to the state and local governments, how much better would they have to do for it to make a significant difference in their bottom line, let alone enough profit to justify the investment made or even to make up for low revenues to date.