Interviewer view · keep this screen to yourself

Same bets, different tax: where should a sportsbook spend its marketing?

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

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?

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Contribution per state = net revenue minus tax, variable costs and marketing
- Gross gaming revenue = handle x hold
- Net revenue = gross gaming revenue minus free bets and promotions
- State tax on gross gaming revenue, at each state's rate
- Variable costs and marketing
- Test: a month of bad luck when hold falls to 8 percent

4. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Gross gaming revenue
What a strong candidate does: Handle times hold, the same in both states.
Gross gaming revenue per state (USD million): 500 × 0.1 = 50
Step 2: Net revenue
What a strong candidate does: Take off USD 10 million of free bets.
Net revenue per state (USD million): 50 - 10 = 40
Step 3: Contribution in State A
What a strong candidate does: Tax of 51 percent of USD 50 million, variable costs of 12 percent of USD 40 million, and USD 6 million of marketing.
State A contribution (USD million): 40 - 50 × 0.51 - 40 × 0.12 - 6 = 3.7
Step 4: Contribution in State B
What a strong candidate does: The same sum with tax at 20 percent.
State B contribution (USD million): 40 - 50 × 0.2 - 40 × 0.12 - 6 = 19.2
Step 5: State A in a month with 8 percent hold
What a strong candidate does: Gross gaming revenue falls to USD 40 million and net revenue to USD 30 million, while free bets and marketing stay the same.
State A contribution at 8 percent hold (USD million): 30 - 40 × 0.51 - 30 × 0.12 - 6 = 0

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

Northline should put its next marketing dollar into State B, because the same USD 500 million of bets leaves USD 19.2 million there against USD 3.7 million in State A. First, State A's 51 percent tax takes USD 25.5 million before any other cost, so free bets and marketing there are paid mostly with money that would otherwise have been profit. Second, State A has no cushion: one month with an 8 percent hold instead of 10 percent wipes out its contribution. The risk is that cutting promotions in State A loses players to rivals that keep spending, and that State B raises its own tax, as several states did in 2025. As a next step, cut free bets in State A to the level that keeps active players, and measure the cost to win a new player in each state before moving budget.

Risks a strong answer names: Hold swings with sports results, so one month says little; States changed betting tax rates often in 2025 and 2026.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.

Next: another case in Partner mode

Swap roles and run the next case, so you both practise answering and scoring.

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