LETTERS TO THE EDITOR: THE YES GROUP RESPONDS

To the Editor:

We would like to assist Dr. Michael Wulfers in his attempt to grasp the business aspects of the riverboat proposition. Obviously, judging from his Letter to the Editor on Wednesday, he could use some help. Dr. Wulfers' inept interpretation of the facts is certainly excusable as an honest mistake, in that he is a physician, not a businessman.

For the benefit of those who did not read Dr. Wulfers' article, in essence what this "No" leader did was to take facts presented in a previous letter by the Yes Group and jumble them together in his own simplistic fashion.

Before we deal with the specifics of his mathematical inaccuracy, we would first state that the figures presented in our initial letter were correct. What was incorrect was the manner in which Dr. Wulfers interpreted them. What he attempted to do was show that, given the figures provided in our article, one could simply add them together and come up with a net operating loss for the riverboat -- an operating loss as he calculated it over $1.5 million He further concludes, given this erroneous assumption, that "The Yes Group didn't make it past first-grade arithmetic" and "The Boyd Group are very poor businessmen."

We would take this opportunity to point out to Dr. Wulfers that the Yes Group did, in fact, "make it past first-grade arithmetic" in that the Yes Group includes individuals with undergraduate and graduate degrees in business administration, as well as countless years of practical business experience.

Likewise, we would point out to Dr. Wulfers that the members of The Boyd Group are, indeed, very astute businessmen. William S. Boyd, chairman and chief executive office, after receiving a law degree from the University of Utah, practiced law for 15 years before cofounding The Boyd Group in 1973. The Boyd Group currently employs about 7,000 people in its hotel, restaurant and casino holdings. So, to say they are not good businessmen would certainly not be accurate.

To make a long story short, what Dr. Wulfers inadvertently did was include in his calculation the entire amount listed for beginning inventory and operating supplies, $11.7 million, and lumped it in with annual expense figures. Dr. Wulfers began correctly in his calculations with $45 million in gross gaming receipts, but went wrong after that. From that $45 million figure, he deducted items mentioned in the article to be considered expenses, such as $16.1 million in wages, $6.5 million in benefits, $8.1 to the state's educational fund, $1 million for repairs and maintenance, $500,000 in fuel, $400,000 in utilities, $900,000 for the city's share of gross receipts, $1 million to the city from the boat's per capita tax, $360,000 in property tax. All of the preceding could reasonably be considered annual expenses. But, what Dr. Wulfers also included in his laundry list was a full deduction for inventory and operating supplies in the amount of $11.7 million. What Dr. Wulfers obviously didn't know, or failed to tell the reader, is that our letter specifically stated, " ... inventory and operating supplies estimated at $11.7 million in the first year of operation ..." This amount was included, as our letter states, to illustrate the fact that "many of these purchases will generate income for local individuals and businesses such as food and beverage suppliers." It was not included for the purpose of calculating net profit for that first year period.

We would explain to Dr. Wulfers that start-up inventory and operating supplies, according to established accounting and business practice, are not completely deductible in the first year of operation. These costs must be deducted, or more accurately amortized, over a period of years. The $11.7 million for inventory and operating supplies will ultimately come from the $45 million in annual gross revenues, as we stated. But, it should not be deducted in its entirety from the first year of operation, as Dr. Wulfers' figures suggest.

An honest mistake? Of course.

But, we would wish in the future, however, if the "No" leaders are going to use facts, that they try diligently to get them right. Anyone can make a mistake. But, to paraphrase the late Sen. Everett Dirksen, " ... a million here and a million there, before you know it, you're talking about a lot of money."

Again, like it or not, the riverboat will bring much more money to Cape Girardeau than it takes away. We need the jobs and the opportunity the riverboat will provide.

Don't just vote yes on Nov. 2. Vote yes because you understand the facts.

DAVID B. KNIGHT

CHUCK MCGINTY

TOM MOGELNICKI

EVELYN BOARDMAN

KENT ZICKFIELD

The Yes Group directors

Cape Girardeau