Bingo Case Study

Executive Summary

Given Kevin Bubel’s latest strategic move in order to keep his bingo hall prosperous, he purchased his only other competitors bingo hall: Mayfair Bingo. This was instigated by the threat of a looming smoking bylaw that would put both businesses in danger. Now Bubel is left with a 20,000-square-foot building in which he has no immediate use for. The current utilities and property taxes are costing him $500 a day.  

Analysis of Issues

Kevin Bubel, manager of Barrie Charity Bingo (BCB), was informed of the introduction of a smoking bylaw that would prohibit smoking in public places. At the time, there were two bingo halls in the Barrie area: BCB and Mayfair Bingo, where approximately 75% of all bingo players are smokers. This presented the issue that both bingo halls would not survive due to the fact that if the bylaw passed revenues could potentially be cut in half. On impulse, Bubel bought out the owner of Mayfair Bingo with the agreement of $1.5 million. Mayfair was only estimated to be roughly worth $400,000, meaning Bubel paid $1.1 million for Mayfair to close its doors immediately and for a 20,000-square-foot building on two acres of prime land. However, after much debate and protest, Bubel was able to get BCB to be an exemption from the bylaw where smoking was not prohibited. Now there is an issue of what to do with the Mayfair building. The building thus far has approximately already cost Bubel $40,000 due to debt servicing, property taxes, and utilities. Despite the current impending costs, Bubel felt the bingo monopoly would net him a further $250,000. The overall pressing issue is that Mayfair is currently costing Bubel $500 a day.

Proposal/Solution To Problem

Bubel has been presented with three options: first option is to sell the building, alleviating him of the buildings financial pressure. It was divulged that Mayfair would not be an easy sell and that Bubel would have to drop the price significantly, wait for the right...