Contact Us
							Report A Violation
                            Gaming Locations
                            Tribal Access Portal
 Facebook
                            Twitter
                            LinkedIn
                            Youtube
                            RSS
                            (202) 632-7003
                            ContactUs@nigc.gov
 Search

            HomeCommissionAbout UsHistoryAgency Strategic GoalsOrganizational StructureStrategic PlanFederal Employee Viewpoint SurveyPerformance DashboardAgency ActionsCommission Final DecisionsEnforcement ActionsNEPA Decision of RecordsCategorical Exclusion Administrative RecordCommissionersChair's NoticeSpeechesPast CommissionersContact UsFrequently Asked QuestionsHuman Trafficking ResourcesLegislative AffairsCongressional TestimonyLegislative HistoryNIGC Guidance Regarding COVID-19Office of Self-RegulationPublic HearingsReports and PublicationsAnnual ReportsCompliance ReportsFOIA ReportsGross Gaming Revenue ReportsQuarterly FOIA ReportsRulemakingTribal ConsultationsConsultation PolicyTribal Consultation 2021Tribal Consultation 2018Tribal Consultation 20172017 Consultation BriefingTribal Consultation 2015Draft Strategic Plan 2014-2018Tribal Consultation 2013Electronic One Touch BingoRegulatory Review 2011-20132013 Summary of Regulatory ChangesTribal Advisory CommitteeRegulatory Review 2010-2011Regulatory Review 2005-2010ComplianceAlternate StandardsAuditInternal Control AssessmentFinancial SubmissionsInternal Audit MICS ComplianceBulletinsChecklists and WorksheetsRegional OfficesOklahoma City Regional OfficePortland Regional OfficePhoenix Regional OfficeSacramento Regional OfficeSt. Paul Regional OfficeTulsa Regional OfficeWashington DC Regional OfficeRapid City Regional OfficeReport A ViolationFinanceAnnual Commission BudgetsFeesPay.govFingerprint FeesPay.govGross Gaming RevenuesManagement ContractsSubmitting a Mgmnt. ContractPublic AffairsBiographiesCommunity ImpactEvent CalendarFact SheetsFeatured ArticlesMedia CenterSeals and GraphicsPress Conferences & TranscriptsNews ReleasesReflecting on 30 Years of IGRASocial MediaGeneral CounselCompactsGaming OrdinancesLegal OpinionsDeclination LettersGame Classification OpinionsIndian Lands OpinionsLaws and RegulationsCommission RegulationsEPHS Interpretive RuleGaming Criminal Laws and PenaltiesDOI Gaming RegulationsIndian Gaming Regulatory ActJohnson ActNational Environmental Policy ActTechnologyCJIS Resource MaterialsFingerprint ProcessIT Vulnerability AssessmentKiteworks Guide for External UsersTech Alerts and WarningsTribal Access PortalUsing TAPObtaining TAP CredentialsTrainingCatalog of CoursesEnvironment, Public Health and SafetyTailored & Site Specific TrainingToolkitsAuditing Revenue 543.24 ToolkitBingo 25 CFR 543.8 ToolkitCage 25 CFR 543.18 ToolkitIT 25 CFR 543.20 Toolkit25 CFR 543.21 Surveillance Audit ToolkitTraining Event CalendarVideo LibraryI want to....Contact the nearest NIGC officeSubmit electronic financial statementsView upcoming training & eventsFind the Min. Internal Control StandardsSee agency decisions and actionsReport A ViolationView NIGC's Indian gaming regulationsRequest a Declination LetterRequest a Game Classification OpinionRequest an Indian Lands OpinionSubscribe to NIGC News and Updates Bulletins
                

                Home
                    Compliance
					Bulletins Date
                                              Publication Number
                                              Title
                                              Topic09/26/2003
                                              	No. 2003-4
                                                Audit Requirements for Gaming Operations / Gross Gaming Revenue Computation
                                                Use of Net Gaming RevenuesAudit Requirements for Gaming Operations / Gross Gaming Revenue Computation
                                September 25 , 2003



Subject: Audit Requirements for Gaming Operations – Gross Gaming Revenue Computation

The purpose of this Bulletin is to reaffirm our position regarding the computation of gross gaming revenue, specific to financial statement presentation. Based on the review of audit reports, we have detected errors in the computation of revenue derived from gaming sources. As noted below, the major problems concern the understatement of gaming revenues by deducting amounts that should be classified as a cost or operating expense.

The Indian Gaming Regulatory Act, Section 571.12 of 25 C.F.R. requires the following:

A tribe shall engage an independent certified public accountant to provide an annual audit of the financial statements of each gaming operation on Indian lands. Such financial statements shall be prepared in accordance with generally accepted accounting principles (GAAP) and the audit(s) shall be conducted in accordance with generally accepted auditing standards. Audit(s) of the gaming operation required under this section may be conducted in conjunction with any other independent audit of the tribe, provided that the requirements of this chapter are met.

The American Institute of Certified Public Accountants (AICPA) has issued interpretations of GAAP relevant to specific industries, which are intended to provide accounting and auditing guidelines. Accordingly, the AICPA Industry Audit and Accounting Guides–Audits of Casinos stipulates that, by definition, gross gaming revenue is the net win from gaming activities, which is the difference between gaming wins and losses before deducting costs and expenses. The NIGC definition of gross gaming revenue is consistent with the professional pronouncement. Refer to Section 542.2 of 25 C.F.R.

Specifically, we have noted the following practices that are in conflict with the AICPA’s professional pronouncement and NIGC Regulations:

Inter-Casino Linked Systems (includes Wide Area Progressive Systems).

A gaming operation may deduct from winnings only its pro-rata share of inter-casino linked system payouts. It is not permissible to deduct amounts to cover payment of fees, costs, or expenses associated with, or attributable to, administrating the inter-casino system, or similar such enterprise.

Operating Lease Payments.

In some operations, the casino pays a percentage of the revenue generated by participating gaming machines to equipment distributors or manufacturers for use of the machines. The deduction of such payments from the amount wagered is not permitted. The total win should be recorded as revenue and the participating distribution should be recognized as an operating expense.

Tribe/State Compact Payments.

The deduction of amounts paid to a State or other designated entity is a cost of doing business in that jurisdiction and not a payout or loss arising from a wagering transaction. Therefore the payments do not represent an allowable deduction from win.

Promotional Allowances.

Casino complimentaries (comps) that a casino gives to customers as an inducement to gamble may not be included as a deduction in the computation of gross gaming revenue.

The retail amount of promotional allowances is often disclosed in the financial statements, preferably, in the financial statement notes. However, this amount may be included in gross revenues and offset by deducting it from gross revenues on the face of the income statement.

Other Compensation.

For card games, tournaments and any other games in which the casino is not a party to a wager, gross gaming revenue shall include all money received as compensation for conducting the game, i.e. rake, commissions, entry fees, and admission fees.

In addition to understating gross gaming revenue, the improper deduction of these amounts also understates assessable gaming revenue (See section 514.1(b) of 25 C.F.R.) and the fee assessments.

**********

Should you have any question, please call the Division of Audits at (503) 326-7050 or submit inquiries to our website at www.nigc.gov.
               
                  		                    News by Category
                                News Release
									
  									 Speeches and Presentations
									
  									 Dear Tribal Letters
									
  									 Bulletins
									
  									 Federal Register Notices
									
  									 Feature Articles

                            Recent News
                                        EventsSecretary Haaland Announces Appointments to National Indian Gaming Commission
                                                        March 25, 2024
												 
                                                NIGC Announces Departure of Chairman E. Sequoyah Simermeyer
                                                        February 20, 2024
												 
                                                Dear Tribal Leader Letter Regarding: NIGC Chairman Encourages Fee Payments Via Pay.gov
                                                        January 22, 2024
                                        NIGC 2-Day In-Person Compliance Workshop: Pathways to Compliance
                                            May 14, 2024
                                                9:00 am Commission
                                          About Us
                      
                    
                  
                      
					  
                          Agency Actions
                      
                    
                  
                      
					  
                          Commissioners
                      
                    
                  
                      
					  
                          Past Commissioners
                      
                    
                  
                      
					  
                          Contact Us
                      
                    
                  
                      
					  
                          Frequently Asked Questions
                      
                    
                  
                      
					  
                          Human Trafficking Resources
                      
                    
                  
                      
					  
                          Legislative Affairs
                      
                    
                  
                      
					  
                          NIGC Guidance Regarding COVID-19
                      
                    
                  
                      
					  
                          Office of Self-Regulation
                      
                    
                  
                      
					  
                          Public Hearings
                      
                    
                  
                      
					  
                          Reports and Publications
                      
                    
                  
                      
					  
                          Rulemaking
                      
                    
                  
                      
					  
                          Tribal Consultations   
                          
                      
					  
                    
                  
                      
                          
                              Compliance
                                          Alternate Standards
                      
                    
                  
                      
					  
                          Audit
                      
                    
                  
                      
					  
                          Bulletins
                      
                    
                  
                      
					  
                          Checklists and Worksheets
                      
                    
                  
                      
					  
                          Regional Offices
                      
                    
                  
                      
					  
                          Report A Violation   
                          
                      
					  
                    
                  
                      
                          
                              Finance
                                          Annual Commission Budgets
                      
                    
                  
                      
					  
                          Fees
                      
                    
                  
                      
					  
                          Fingerprint Fees
                      
                    
                  
                      
					  
                          Gross Gaming Revenues
                      
                    
                  
                      
					  
                          Management Contracts   
                          
                      
					  
                    
                  
                      
                          
                              Public Affairs
                                          Biographies
                      
                    
                  
                      
					  
                          Community Impact
                      
                    
                  
                      
					  
                          Event Calendar
                      
                    
                  
                      
					  
                          Fact Sheets
                      
                    
                  
                      
					  
                          Featured Articles
                      
                    
                  
                      
					  
                          Media Center
                      
                    
                  
                      
					  
                          News Releases
                      
                    
                  
                      
					  
                          Reflecting on 30 Years of IGRA
                      
                    
                  
                      
					  
                          Social Media   
                          
                      
					  
                    
                  
                      
                          
                              General Counsel
                                          Compacts
                      
                    
                  
                      
					  
                          Gaming Ordinances
                      
                    
                  
                      
					  
                          Legal Opinions
                      
                    
                  
                      
					  
                          Laws and Regulations   
                          
                      
					  
                    
                  
                      
                          
                              Technology
                                          CJIS Resource Materials
                      
                    
                  
                      
					  
                          Fingerprint Process
                      
                    
                  
                      
					  
                          IT Vulnerability Assessment
                      
                    
                  
                      
					  
                          Kiteworks Guide for External Users
                      
                    
                  
                      
					  
                          Tech Alerts and Warnings
                      
                    
                  
                      
					  
                          Tribal Access Portal

            
            Copyrights © 2024 All Rights Reserved by NIGC.govTerms of Use / Privacy Policy / Download Adobe Acrobat Reader
                    
                     Stay updated on the NIGC

						Sign up to receive the latest gaming news and updates!

                    Facebook

                            Twitter

                            Linkedin

                            YouTube


                            RSS

                        

                         info@nigc.gov ·  202-632-7003