Tribal Casinos: Review Gross Gaming Revenue Information to Comply With NIGC Request

  • Industry trends
  • 8/25/2020

Tribal governments may need to begin submitting casino gaming revenue information to the National Indian Gaming Commission. Review details to understand your responsibilities.

Key insights

  • The National Indian Gaming Commission is requesting gross gaming revenue information from tribal governments and their casinos.
  • Review financial statements to determine what information you need to share.

Need help understanding how to report gross gaming revenue?

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Tribal nations may need to review and adjust their financial reporting as a result of a recent request. The National Indian Gaming Commission (NIGC) issued a “Dear Tribal Leader” letter requesting information about gross gaming revenue (GGR). The letter references the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 606 (ASC 606), which addresses revenue recognition — and, by effect, net gaming revenues (NGR).

What is the gaming commission requesting in the letter?

The NIGC will review 2017, 2018, and 2019 financial statements to determine if they can readily identify GGR for the last three fiscal years. If not, GGR information must be submitted by September 18, 2020.

Let’s clarify a few points regarding the NIGC request

Many tribal casinos report in accordance with generally accepted accounting principles (GAAP) as established by Governmental Accounting Standards Board (GASB), and ASC 606 may not apply. However, some concepts in that standard are reflected in GASB reporting.

The AICPA’s Gaming Audit and Accounting Guide defines GGR as “the win from gaming activities, which is the difference between gaming wins and losses before deducting costs and expenses or deducting incentives or adjusting for changes in progressive jackpot liability accruals. Generally, the difference between patron wagers and the payouts made on winning wagers.” The GGR information is used by the NIGC as an overall industry indicator and for policy setting.

However, in practice, many tribal casinos’ revenue recognition accounting policies report NGR, which is defined as “gross gaming revenues less cash sales incentives and the change in progressive jackpot liabilities and revenue from gaming related activities. Cash sales incentives include discounts and match play in table games or free play and slot club points in slot transactions.”

Determine if you are reporting net gaming revenues

Review the Summary of Significant Accounting Policies in the notes to the financial statements. Typically, there is a disclosure describing revenues and your loyalty program. If you are currently reporting NGR, the NIGC is requesting you disclose additional information so it can determine your GGR.

See the example below, which would reconcile to the audited financial statements provided to the NIGC.

Gaming Revenue 2019 2018
Class II Gaming Devices $XXX $XXX
Class III Gaming Devices XXX XXX
Table Games XXX XXX
Poker XX XX
Pull Tabs XXX XXX
Free play, cash back, progress liabilities (XXX) (XXX)
Net Gaming Revenue* $XXX $XXX

*This amount would reconcile to the statement of revenue, expenses, and changes in net position included in the financial statements.

If you consolidate multiple locations into a single presentation, the NIGC is requesting that you disclose your information by location, in the same manner, with the sum of these amounts tying to the NGR presented in the financial statements.

How we can help

We understand that Indian Country and tribal gaming operations have been deeply impacted by the coronavirus pandemic. The CLA tribal services team is here to help answer your questions and assist with preparing these disclosures.

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