The gaming industry is a unique environment for the accountant. There is far more cash than is normally found in most organizations, plus a number of different transactions to account for - jackpots, loyalty programs, gaming chips, comps, and more. The result can be bewildering. Accounting for Casinos and Gaming is designed to bring clarity to the situation by providing an overview of gaming operations, and describing those accounting issues most relevant to a gaming entity.
Topics covered include the accounting for loyalty and incentive programs, jackpots, chips and tokens, licensing fees, payroll, marker collections, fixed assets, interest capitalization, gaming controls, and federal reporting requirements.
Upon successful completion of this course, participants will be able to:
- Recognize the factors that can impact the level of gaming taxes.
- Identify the different types of games.
- Note the responsibilities of a casino controller.
- Recognize the responsibilities of the cage staff, and the types of transactions that they handle.
- State the types of transactions used to supply chips to and remove cash from a gaming table.
- Recognize the calculation for gross gaming revenue.
- Identify the contents of a table drop box.
- Note how a TITO system functions.
- Recognize the different accounting principles.
- Recall which accounting system incorporates the concept of being out of balance.
- Note the source of the information for the trial balance.
- Recall the definition of revenue in the gaming industry.
- Identify the operations within a casino that can produce a deferred revenue liability.
- Note the proper accounting for the different types of comps, promotional allowances, and deals offered to customers.
- Identify the situations in which a Form W-4 is used.
- Recognize the methods used to calculate employee compensation.
- Recall the timing of payroll tax deposits under the different deposit schedules.
- Note how the FUTA tax is calculated.
- State the reasons why a casino might accept a write-down on a marker.
- Note why the direct write-off method is not the best way to account for bad debts.
- Recall the costs that can be capitalized into a fixed asset.
- Note the intent behind using the mid-month convention.
- Identify the calculations used for accelerated depreciation methods.
- Recall the proper accounting for idle assets.
- Identify the situations in which interest capitalization should be used.
- Note the correct accounting treatment of loan commitment fees.
- Recall which information is listed in a loan amortization table.
- Note the different types of theft that can arise in a casino.
- Identify the controls that can apply to comps, markers, bingo, and dealers.
- Recognize the logging mechanisms used to identify currency transaction reporting issues.
- Recognize the line items used in each of the financial statements.
- State the requirements for being subject to the Bank Secrecy Act, and the reporting requirements associated with it.
Table of Contents
Chapter 1 – Gaming Operations
Types of Games
Casino Organizational Structure
Physical Organization - Casino
Physical Organization – Card Room
Table Game Operations
Credit Slip Transactions
Player Rating System
Table Drop Boxes
Slot Machine Operations
Currency Acceptor Drop
Slot Gaming Revenue Calculation
Race and Sports Book Operations
Chapter 1 – Review Questions
Chapter 2 – The System of Accounting
Financial Accounting Basics
The Accounting Cycle
Types of Transaction Cycles
Double Entry Accounting
The Accounting Equation
The Accruals Concept
The Chart of Accounts
Major Journal Entries
The Ledger Concept
Posting to the General Ledger
General Ledger Overview
The Trial Balance
The Trial Balance Format
The Extended Trial Balance
Accrual Basis of Accounting
Chapter 2 – Review Questions
Chapter 3 – Gaming-Specific Accounting
Discounts on Losses
Accounting for Jackpots
Accounting for Unpaid Winners
Loyalty and Incentive Programs
Nondiscretionary Incentives – Cash Redemption Allowed
Nondiscretionary Incentives – Free Play Only
Nondiscretionary Incentives – Multiple Redemption Options
Gaming Chips and Tokens
Licensing and Preopening Costs
Gaming License Costs
Tax Impact of Customer Credit
Deferred Income Taxes
Chapter 3 – Review Questions
Chapter 4 – Payroll Accounting
Employee Time Tracking
Gross Pay Calculations
Hourly Rate Plan
Types of Payroll Taxes
Social Security Tax
Income Tax Withholdings
Benefits and Other Deductions
Remitting Payroll Taxes
Types of Tax Deposit Schedules
Monthly Deposit Schedule
Semiweekly Deposit Schedule
Federal Unemployment Deposit Schedule
The Form 941 Quarterly Federal Tax Return
State Tax Remittances
Payments to Employees
The Payroll Register
Payroll Journal Entries
Types of Payroll Journal Entries
Primary Payroll Journal Entry
Manual Paycheck Entry
Accrued Vacation Pay
Chapter 4 – Review Questions
Chapter 5 – Receivables and Payables Accounting
Accounting for Accounts Receivable
Accounting for Bad Debts
Direct Write-Off Method
Allowance for Doubtful Accounts
Accounting for Accounts Payable
The 1099 Vendor
Chapter 5 – Review Questions
Chapter 6 – Fixed Asset Accounting
What are Fixed Assets?
Fixed Asset Classifications
Accounting for Fixed Assets
The Capitalization Limit
The Base Unit
The Initial Measurement of a Fixed Asset
The Purpose of Depreciation
Sum-of-the-Years’ Digits Method
Double-Declining Balance Method
Units of Activity Method
The Depreciation of Land
The Depreciation of Land Improvements
Depreciation Accounting Entries
Measurement of Asset Impairment
The Asset to be Tested
Timing of the Impairment Test
Accounting for the Impairment of an Asset Group
Abandoned and Idle Assets
Asset Disposal Accounting
Slot Participation Agreements
Chapter 6 – Review Questions
Chapter 7 – Interest Capitalization
Overview of Capitalized Interest
When to Capitalize Interest
The Interest Capitalization Period
The Capitalization Rate
Calculating Interest Capitalization
Chapter 7 – Review Questions
Chapter 8 – Debt Accounting
Basic Debt Accounting
The Amortization Schedule
Reconciling the Debt Account
Chapter 8 – Review Questions
Chapter 9 – Controls and Policies
Types of Gaming Theft
Race and Sports Book Controls
Slot Machine Controls
Chip and Token Controls
Table Game Controls
Key Access Controls
Count Team Controls
Physical Access Controls
Information Technology Controls
Money Laundering Controls
Indicators of Control Weaknesses
Credit Write-Off Policy
Fixed Asset Disposal Policy
Jackpot Approval Policy
Winnings Claim Period Policy
Ticket Payout Redemption Period
Chapter 9 – Review Questions
Chapter 10 – Financial Reports
Calculation of Income Statement
The Income Statement
The Balance Sheet
The Statement of Cash Flows
The Direct Method
The Indirect Method
Financial Statement Disclosures
Profit Center Reporting
Other Accounting Reports
Chapter 10 – Review Questions
Chapter 11 – Reporting Requirements
Treatment as a Financial Institution
Currency Transaction Report
Suspicious Activity Report
Customer Reporting Avoidance Strategies
Multiple Transaction Log
Credit Management System
Player Rating System
Wire Transfer Log
Winnings Reporting Forms
Chapter 11 – Review Questions
Review Question Answers and Rationales
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