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Key Takeaways
- The foundational monthly fixed operating expense required to maintain essential services like security and IT infrastructure totals $310,000.
- Gaming Taxes and Licensing represent the single largest operational drain, consuming 100% of projected gaming revenue according to the 2026 model.
- Despite high variable costs, the projected revenue structure allows the casino operation to reach financial break-even within the first month of operation.
- A substantial minimum cash buffer of $448 million is necessary to cover initial capital expenditures and ensure operational float against revenue volatility.
Running Cost 1 : Gaming Taxes Licensing
Tax Liability Shock
Gaming Taxes Licensing becomes your largest variable cost, hitting 100% of total revenue in 2026, which demands a $339 million annual payment. You must secure the cash flow for this non-negotiable compliance cost immediately, as failure to pay promptly suspends operations.
Tax Calculation Inputs
This cost covers the mandatory government fee for operating a gaming establishment. It scales directly with revenue, starting at 100% in 2026, equating to $339 million annually based on current projections. You need reliable revenue forecasts across gaming and hospitality to estimate the exact quarterly liability due.
- Yearly revenue projections.
- Statutory tax rate (100% in 2026).
- Required payment timing.
Managing Compliance Cash
Since the rate is fixed by regulation, you cannot reduce the percentage itself, so management focuses on liquidity planning. Ensure your working capital reserves are defintely large enough to cover this massive payment when due. Avoid common pitfalls like underestimating the impact of slow seasonal revenue dips near payment dates.
- Model cash flow timing precisely.
- Prioritize high-margin revenue streams.
- Verify local regulatory payment schedules.
Compliance Deadline Risk
If your 2026 revenue projections are aggressive, the $339 million tax liability will create an immediate cash shortfall if not reserved for. This fee is not overhead you negotiate; it’s the price of entry. Fund this requirement before committing capital to fixed costs like the $80,000 monthly security budget.
Running Cost 2 : Executive Payroll
Executive Payroll Load
Executive payroll for the 8 key management positions totals $128 million annually. This fixed overhead translates to $106,667 per month, covering vital leadership roles from the General Manager down to the Finance Controller. This is a significant, non-negotiable fixed expense for the resort operations.
Payroll Inputs
This Executive Payroll covers 8 full-time employees (FTEs) managing core functions like operations and finance. You need the agreed-upon annual compensation packages for these leaders, including base salary and expected bonuses, to calculate the $128 million annual run rate. This cost is fixed regardless of gaming revenue volume.
- 8 leadership FTEs budgeted.
- Covers GM to Controller roles.
- Monthly cost is $106,667.
Managing Fixed Salaries
Reducing executive payroll requires careful structuring, not just cuts. Since these are essential roles, focus on performance-based compensation structures. Avoid locking in high guaranteed salaries; instead, tie a larger portion of total compensation to achieving specific operational milestones or profitability targets. That’s how you align incentives.
- Base salaries must be competitive.
- Shift bonuses to performance metrics.
- Avoid over-hiring early on.
Payroll Context
Compare this $128 million annual salary load against the projected $339 million in Gaming Taxes in 2026. High fixed executive costs mean you need massive, immediate revenue generation just to cover mandatory compliance and leadership overhead before marketing or operations spend begins. This payroll defintely pressures early cash flow.
Running Cost 3 : Security Operations Base
Security Fixed Cost
The Security Operations Base is a non-negotiable fixed expense, budgeted at $80,000 monthly for player safety and asset protection. Because this cost doesn't scale with revenue, managing operational efficiency here is key to controlling overall overhead before volume kicks in.
Security Cost Breakdown
This $80,000 monthly figure represents the base operational budget for physical security personnel and the underlying systems supporting asset protection. Unlike gaming taxes or food costs, this expense is static. It must be covered regardless of guest volume or revenue performance.
- Covers player safety protocols.
- Protects high-value gaming assets.
- Fixed at $960,000 annually.
Managing Security Spend
Since this is fixed, optimization means ensuring staffing levels match actual risk profiles, not just assumed ones. Avoid over-investing in unnecessary on-site personnel early on; technology integration should offset headcount needs. You defintely want to lock in multi-year rates for monitoring services.
- Benchmark staffing ratios to peers.
- Negotiate long-term vendor contracts.
- Integrate tech to reduce manual oversight.
Overhead Impact
This $80k/month security base must be covered before any variable costs hit your margin. If your total initial fixed overhead (including this and the $50k land lease) exceeds $150,000 monthly, you need significantly higher baseline volume just to break even.
Running Cost 4 : Marketing Advertising
Marketing Spend Scale
Marketing Advertising is a massive variable outlay, hitting $1695 million annually in 2026, equaling 50% of gross revenue. This spend directly funds the acquisition engine needed to fill the gaming floor and secure hotel bookings. You must track Cost Per Acquisition (CPA) rigorously against Average Daily Spend (ADS).
Cost Inputs
This 50% allocation covers all promotional activities designed to attract guests to the resort. Since it scales with revenue, the primary input is projected total revenue for 2026, which yields the $1695 million budget. This dwarfs fixed costs like security ($80k/month) and IT ($30k/month) combined.
- Input: Projected Total Revenue
- Benchmark: 50% of Revenue
- Output: Player Visits & Occupancy
Optimization Focus
Managing this 50% slice requires tight attribution tracking. If marketing spend doesn't generate proportional gaming or hotel revenue, the contribution margin collapses fast. Focus on optimizing the channel mix to lower the blended Customer Acquisition Cost (CAC) without harming occupancy rates; defintely avoid broad branding buys.
- Measure Return on Ad Spend (ROAS)
- Attribute spend to hotel check-ins
- Cut underperforming channels quickly
Risk Proximity
Because Gaming Taxes are 100% of revenue in 2026 ($339M), this 50% marketing spend competes directly with mandatory payments. If marketing efficiency drops even slightly, the financial cushion disappears rapidly. This is a high-stakes lever for growth, demanding constant oversight.
Running Cost 5 : Land Lease Payments
Fixed Site Obligation
This fixed real estate cost is non-negotiable overhead. Securing the physical site for the resort demands a consistent $50,000 monthly payment. This obligation must be covered regardless of gaming revenue or hotel occupancy. It’s pure fixed expense supporting the asset base.
Inputs for Lease Budgeting
This $50,000 monthly charge covers the lease agreement for the entire resort property. It is a fixed operating expense, meaning it doesn't change based on how many people gamble or attend shows. To budget this accurately, you need the signed lease term and the exact monthly payment schedule.
- Lease agreement start date.
- Monthly fixed payment amount.
- Escalation clause details.
Managing Lease Exposure
Since this is a fixed cost, you can’t cut it day-to-day, but you can manage the long-term structure. Avoid leases with aggressive annual escalators if possible. If you have the option, exploring a purchase versus lease analysis might be worthwhile in year three. Don't let this slide.
- Negotiate fixed rates for 5+ years.
- Review renewal options early.
- Compare financing versus operating lease.
Impact on Break-Even
This $50,000 lease payment must be covered before profit. It sits above variable costs like Gaming Taxes and Food Beverage Cost of Sales. If operations dip, this fixed burden increases the break-even point significantly, demanding strong baseline revenue generation just to keep the doors open.
Running Cost 6 : IT Infrastructure Support
Fixed IT Budget
Your fixed monthly outlay for IT Infrastructure Support is $30,000. This budget covers essential network stability and cybersecurity for the integrated gaming and hospitality systems. If this cost slips, system downtime directly impacts gaming revenue and guest satisfaction defintely.
Cost Inputs
This $30,000 monthly spend is a fixed operational cost, not tied to variable revenue streams like gaming taxes or F&B sales. It funds specialized support contracts for high-availability network gear and compliance monitoring necessary for the gaming floor. You need quotes for enterprise-grade security monitoring and dedicated system administrators to validate this baseline.
- Covers complex gaming network maintenance.
- Includes mandatory cybersecurity monitoring.
- Fixed at $360,000 annually.
Managing IT Spend
Never cut cybersecurity or core network stability to save money here; the risk of a breach or outage is too high. Focus on negotiating multi-year contracts for support services to lock in pricing. Avoid paying for unused support tiers, especially in the initial pre-launch phase, which is common when setting up new infrastructure.
- Lock in multi-year support rates.
- Avoid paying for unused capacity.
- Prioritize stability over minor savings.
Budget Certainty
Because this is a fixed cost, model it at $360,000 annually in your operating budget regardless of initial revenue projections. If your initial system complexity is lower than expected, look to consolidate vendor contracts by Q3 2027, but keep the core budget intact for stability.
Running Cost 7 : Food Beverage Cost of Sales
F&B Cost Baseline
Food and beverage inventory costs are a major component of ancillary revenue, starting at 25% of gross sales in 2026. This expense is projected to hit $8,475 million annually as guest volume increases. Managing this variable cost directly impacts overall profitability for the resort operations.
Inputs for Inventory Cost
This cost covers all raw materials—food, liquor, beer, and wine—used in the resort's dining and bar operations. The initial calculation uses the 25% rate against projected 2026 revenue. Since this scales with volume, you need tight tracking of daily inventory usage versus guest counts to keep it accurate.
- Track ingredient usage daily.
- Benchmark against 25% target.
- Factor in seasonal volume spikes.
Controlling Inventory Spend
Controlling this large variable expense requires strict inventory management, especially given the high projected spend. Focus on reducing waste and negotiating better vendor terms for high-volume items like prime cuts or premium liquor. If you can cut this by just 2 points, savings are substantial.
- Implement strict portion control.
- Centralize purchasing power.
- Review vendor contracts quarterly.
Monitoring Cost Drivers
Since this cost scales directly with guest volume, it’s a good indicator of operational efficiency, unlike fixed costs like the $80,000 security base. If your actual Cost of Sales creeps above 25%, it defintely signals procurement leakage or poor menu engineering. This needs immediate CFO review.
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Frequently Asked Questions
The financial model projects an extremely fast break-even date in January 2026, meaning profitability is achieved in the first month of operation This rapid success is due to high projected revenue ($2825 million monthly) and a strong EBITDA forecast of $2694 million in Year 1;