|Eight percent might not be enough for Westgate to break even on SuperContest|
Last week in a series of tweets sent out by the book, they announced the entry fee would remain at $1,500 but “due to rising costs, time and resources we have to dedicate to the event, there will be an 8% ad fee.”
The ad fee is for administrative costs associated with the SuperContest, the premier sports handicapping tournament in the world where contestants choose five NFL sides a week against the spread for 17 weeks. However, it wasn’t long before the SuperBook got a few tweets from the public showing its displeasure with the move, many of those who probably don’t even participate in the contest.
My immediate thought was an administrative fee was actually long overdue. In addition to the Westgate paying the bonus fees of up to $40,000 out of their own pockets, they have advertising fees (about $35,000 is my guess), and credit card fees (maybe $20,000?) have never been talked about.
Think around $90,000 right there in costs out the window in what is an annual loss-leader for the SuperBook. They also pay for the six free SuperContest entry fees given away during SuperContest weekend (Aug. 26-27 this year).
But why should they have to incur losses on something so wildly popular? Last season a record 1,727 people competed with the winner taking home $906,675 (35% of the pot). The SuperBook created a giant, but after it’s all over each season they should be able to at least say they broke even with the venture.
The SuperContest also doesn’t run on auto-pilot. They use thousands of hours of manpower from April through February to operate this thing, and not all from the book itself. It’s an encompassing project throughout the casino and involves services from Westgate departments like accounting, legal, marketing, security and I.T.
What’s the estimated labor cost? Is $85,000 too low an estimate? How about $125,000? It’s a chunky figure for a non-revenue generating venture.
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