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Same bets, different tax: where should a sportsbook spend its marketing?
The prompt
Northline Bet (a fictional online sportsbook in the United States) takes USD 500 million of bets a month in each of two states and keeps 10 percent of the money bet. It gives away USD 10 million of free bets a month in each state, and payments, data and platform costs are 12 percent of net revenue. It spends USD 6 million a month on marketing in each state. State A taxes 51 percent of gross gaming revenue; State B taxes 20 percent. What does each state earn Northline, and where should its next marketing dollar go?
Your interviewer will share data as you ask for it. Ask clarifying questions, state a hypothesis, then lay out your structure out loud before you calculate.
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