casino accounting
In the casino annual financial report it lists gaming profit, hotel profit and sometimes a promotional cost. Can someone illustrate how my play impact on the casino report.
Is the gaming profit $10000? or $10000 - $200?
Does the hotel revenue go up by $30? If it does, isn't the hotel profit section inflated because I am forced to spend the $30 dollars in its hotel at the rack rate? If the hotel and casino were 2 separate business, the casino business is likely to pay less than $30 cash for $30 dollars of hotel credit from the hotel business.
Suppose I play on a VIP rolling program. In the end I lose $10000. I receive 200 dollars in cash commission and 30 dollars in hotel/food credit. Is the accounting the same?
Quote: AlanMendelsonI don't know but I am interested in finding out why you care? Do you suspect, for example, that a casino company could cook it's books by the way it counts promotions?
Yeah, I was thinking the exact same thing. Sometimes the questions here are so unexpected yet very specific. Makes you wonder. Anyway, I'm sure newbie49 was just innocently curious though.
Quote: newbie49Suppose I play in a casino. In the end I lose $10000. From my casino royalty card I get 200 dollars in cash back and 30 dollars in hotel/food credit.
In the casino annual financial report it lists gaming profit, hotel profit and sometimes a promotional cost. Can someone illustrate how my play impact on the casino report.
Is the gaming profit $10000? or $10000- $200?
Does the hotel revenue go up by $30? If it does, isn't the hotel profit section inflated because I am forced to spend the $30 dollars in its hotel at the rack rate? If the hotel and casino were 2 separate business, the casino business is likely to pay less than $30 cash for $30 dollars of hotel credit from the hotel business.
Suppose I play on a VIP rolling program. In the end I lose $10000. I receive 200 dollars in cash commission and 30 dollars in hotel/food credit. Is the accounting the same?
Suppose the actual room rate was $100. Using double-entry bookkeeping it would look something like this:
D10000 cash- casino
C10000 gaming revenue
---
D200 loyalty program- cash
D30 loyalty program- hotel
C200 cash
C30 hotel credit
---
D70 cash- hotel
C100 hotel revenue
D30 hotel credit
Net would be:
D9800 cash- casino
D70 cash- hotel
C10000 gaming revenue
D200 loyalty program- cash
D30 loyalty program- hotel
C100 hotel revenue
The hotel would show $100 revenue, but there is also a separate account where discounts are kept to see that the net profit is actually $70.
Gaming would show $10000 revenue, but only $9800 profit.
There is a huge difference between revenue and profit.
If the two were run as separate businesses, there would also likely be some kind of entries such as
for the casino:
C20 cash- casino
D20 credits paid to hotel
for the hotel:
D20 cash- hotel
C20 credits paid by casino
The hotel could then add in the $20 paid by the casino to show a net profit of $90.
In 1986, I worked as a DJ in a hotel nightclub. Because they were concerned with people driving tired and drunk, rooms were available very cheap when the club closed. I forget how much. But the employee rate was even cheaper. Something like $4. That was the cost of sending in housekeeping the next day. IE. The actual difference between an empty room and occupied.
Once the casino has the room it can give it away free or whatever. The accounting is in the name of the Promotion Fund or Player Development Fund.
Casino winnings are independent of whether a person has a room there or not and independent of whether he pays for some or all of that room or not. Also independent of whether he gets a free beer or a free bottle of expensive wine.
Think of a host as working for "Player Development" so room charges and free booze are a matter of the bottom line to a particular cost center but not the casino.
