dlevinelaw
dlevinelaw
Joined: Dec 3, 2009
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June 16th, 2010 at 5:30:14 AM permalink
At bellagio, it had to be MAX play at a .25 vp machine (1.25)
ruascott
ruascott
Joined: Mar 30, 2010
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June 16th, 2010 at 5:58:26 AM permalink
How on earth do they monitor that? Couldn't you play Max play for a few draws until you got your drink, and then drop back down?
nyuhoosier
nyuhoosier
Joined: Feb 16, 2010
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June 16th, 2010 at 6:19:31 AM permalink
I suppose once you got your drink you could even get up and leave if you wanted. They don't really monitor it once the drink is poured.
ruascott
ruascott
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June 16th, 2010 at 6:35:06 AM permalink
Quote: ahiromu

First off, I think it's fucking ridiculous for a state to tell the businesses that they can't give their paying customers a legal substance. It pisses me off every time I go to a local casino.

Mainly: How are comped drinks regulated in terms of costs/taxation? I would think that a drink costs them maybe a buck or two, max, but if their "value" is around $10 then they could write off enough taxes to actually pay for that drink and then some. I don't understand these business accounting practices, so if I'm off somewhere please explain it to me (I really do want to know even if it's technical).



I totally agree. The founders of this country would roll in their graves at such an idea in their home state. However, they also set up a system that gave a lot of power to the states, so I guess they'd live with it - as long as not in their state. I agree, the midwest has some of the most dumb ass alcohol laws....we still have blue laws banning sales on Sunday in Indiana outside of restaurants/bars. A lot of these laws that remain I honestly think have a lot more to do with lobbyist pressure from entertainment competitiors. I.E..bars/restaurants don't want to allow Sunday retail sales as that would hurt them; Other entertainment industries don't want casinos to give away free drinks, etc....

You raise an interesting accounting question. It would seem to me that the casino could write off the fair value of the drink...what that fair value is open to interpretation. I really have no idea, but I highly doubt they write off $10/drink. Somewhere in the neighborhood of $2-$3 I would think.
StingMe
StingMe
Joined: May 24, 2010
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June 16th, 2010 at 7:19:54 AM permalink
Quote: ruascott

I agree, the midwest has some of the most dumb ass alcohol laws....



One of the nice things about Missouri (if you drink) is the very powerful lobby Anheuser-Busch has traditionally had in the state legislature. Missouri has been generally a bit slower on alcohol regulation than other mid-western states. Our BAC limit was higher than most states in the region for many years. The MADD politics did finally catch up with that, however, and it was lowered to .08 (not that I necessarily argue with .08). After the big Busch/InBev merger, and with the ever increasing political prowess of groups like MADD, I'm not sure that strong lobby still exists, but I don't spend any time in Jefferson City.
DJTeddyBear
DJTeddyBear
Joined: Nov 2, 2009
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June 16th, 2010 at 7:56:13 AM permalink
Quote: ahiromu

How are comped drinks regulated in terms of costs/taxation?

Have you ever noticed that at restaurants the alcoholic drinks are not subject to sales tax?

That's because the liquor tax is paid at the wholesale level.

So, tax-wise, the state doesn't care how much the drink costs, or if the casino gives it away. The tax was already paid.
I invented a few casino games. Info: http://www.DaveMillerGaming.com/ ————————————————————————————————————— Superstitions are silly, childish, irrational rituals, born out of fear of the unknown. But how much does it cost to knock on wood? 😁
teddys
teddys
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June 16th, 2010 at 8:03:19 AM permalink
I don't know about New Jersey, but I think laws might differ on taxation of prepared drinks in restaurants. I think I have been charged tax on a drink in a restaurant before, but not in bars. Speaking of which, does anyone here work in the food/beverage industry and explain the average profit for drinks? It always amazes me the markups people get away with for an ounce and a half of vodka and some juice or soda. That costs, what, less than $.60? And they charge $4-$10 for it? Absolutely unbelievable -- no wonder Tao in Las Vegas is the highest grossing restaurant in the country. High prices on alcohol is one of the reasons I don't enjoy going out to bars/drinking so much. I understand the social/atmosphere aspect of it, but how do people justify this?
"Dice, verily, are armed with goads and driving-hooks, deceiving and tormenting, causing grievous woe." -Rig Veda 10.34.4
nyuhoosier
nyuhoosier
Joined: Feb 16, 2010
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June 16th, 2010 at 9:03:04 AM permalink
Quote: teddys

It always amazes me the markups people get away with for an ounce and a half of vodka and some juice or soda. That costs, what, less than $.60? And they charge $4-$10 for it?



So true. Most liquor out of the gun costs less than $.40/oz.
ruascott
ruascott
Joined: Mar 30, 2010
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June 16th, 2010 at 9:11:18 AM permalink
Quote: DJTeddyBear

Have you ever noticed that at restaurants the alcoholic drinks are not subject to sales tax?

That's because the liquor tax is paid at the wholesale level.

So, tax-wise, the state doesn't care how much the drink costs, or if the casino gives it away. The tax was already paid.



I think that varies state to state. We have a 9% food and beverage tax here, and it applies to everything. Sometimes bars will sell drinks for a flat price, just for conveinience, like $2 for a beer or $4.50 for mixed drink, but in reality they are selling the beer for $1.83+ tax. Vending machines follow the same philosophy.

In regards to the poster's question, he was referring to how much the casino gets to "write-off" as loss when they give away a free drink, in regards to income tax purposes.
ruascott
ruascott
Joined: Mar 30, 2010
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June 16th, 2010 at 9:29:13 AM permalink
Quote: teddys

I don't know about New Jersey, but I think laws might differ on taxation of prepared drinks in restaurants. I think I have been charged tax on a drink in a restaurant before, but not in bars. Speaking of which, does anyone here work in the food/beverage industry and explain the average profit for drinks? It always amazes me the markups people get away with for an ounce and a half of vodka and some juice or soda. That costs, what, less than $.60? And they charge $4-$10 for it? Absolutely unbelievable -- no wonder Tao in Las Vegas is the highest grossing restaurant in the country. High prices on alcohol is one of the reasons I don't enjoy going out to bars/drinking so much. I understand the social/atmosphere aspect of it, but how do people justify this?



Well there are HUGE ranges in gross margins depending upon what kind of bar/club/restaurant you are at. You local pub probably charges somewhere along the line of $3-4 a well mixed drink. The wells they use probably cost somewhere $7-$10. A bottle has 17 shots in it...so it should bring in around $51-68 in gross revenues.

So it looks like the a typical bar would make somewhere around $40-55/bottle. The margins may be slightly better on high-end booze, but not significantly more. Out of that, bars must cover drink mixers, rent, utilities, licensing fees, wages, entertainment, etc, etc.....Throw on top of that bartenders that overpour, give away free drinks, and flat out steal cash....Needless to say the bar business is a very difficult business to be in.

Obviously the fancier bars/clubs have to charge even more to make up for their large physical invesmtment, often well into the seven figures.

You'd be shocked how little retailers markup alcohol over the wholesale price. Some grocery stores are known to sell beer/booze at a loss to get people in the stores. Its a hyper-competitive market.

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