Prior to COVID-19’s impact on the Gaming industry, loss-leading activities were being eliminated from Gaming enterprises. 

The story goes that Steve Wynn, the “godfather of Gaming”, was the perfect Casino Host prior to becoming the Casino juggernaut, which we know him as today. He’d provide private jets, free meals, complimentary stays, and much more to lure top customers to his establishments. He didn’t use data, but instead a gut feeling that these amenities would result in big play from the guest, and big wins for the Casino. This was the old way of thinking. 

Today, analysts are constantly evaluating the pros and cons of offering amenities. The introduction of the point system by Harrah’s in the 1990s changed the Vice President of Marketing’s role from a charismatic magnet to a data driven “direct mailer”. Accountants are preparing Proformas for private jets, buffet offers, and bus partnerships on behalf of marketing. The gaming industry has become reliant on data and, in response the Casino Hosts job has changed from creating an unforgettable experience to guiding guests through an array of predetermined amenities, if applicable. 

Which way is better? 

Data can ensure that a Casino isn’t giving a small player a big comp or perk, but it can also add red tape to luring a big whale. The Casino host’s job is being replaced by an analyst.

Is this necessarily a bad thing? You be the judge. 

COVID-19 has fast forwarded the elimination of loss-leaders

Loss-leading amenities were slowly being replaced by cash generating amenities prior to COVID-19, but the pandemic only expedited the process. Prior to the COVID-19 shutdowns, buffets were slowly being replaced by food courts and Entertainment was being evaluated on cash profitability, both of these were unheard of, only 10 years ago. 

Now, Casinos are thriving without any loss-leading amenities. Bus partnerships, buffets, complimentary hotel rooms, complimentary show tickets, and even staff, whose job was to increase the guests’ experience have all been eliminated, and without these extra expenses, Casinos are reporting record breaking net income.

When and will loss-leaders come back?

In my opinion, loss leading amenities will be back when competitors begin implementing these items. The Casino industry has forever been a race for the best customers. If there are amenities that lure top customers to competitors, they will be implemented everywhere. It is very much like economics, in that the loss-leading amenities come and go over a period of time, based on what the best customers wants. 

We will see whether the buffet will resurface with time. 


The brief history of Tribal Casinos in America

Tribally owned Casinos have grown steadily over the past 40 years, but as gaming restrictions lessen on non-Tribal entities, I wonder how this will impact a business that has meant so much to Tribal lands. In this blog, I’ll discuss the growth of the Tribal Casinos in America, the challenges, and the impacts these businesses have on Tribal lands nationwide.

The Beginning

In the late 1970s, the Seminole Tribe began to operate bingo halls on its reservation, and although Florida permitted gambling, the state placed many restrictions on the industry. For example, Florida established a ceiling on Jackpot size and determined how often games could be held. The limits set by the state governments limited the revenue tribes could generate from gambling, which paralyzed the business entity’s growth.

Under U.S. law, federally recognized tribes are sovereign nations. Because of this, the Oneida Tribe of Wisconsin and the Seminole Tribe of Florida went to court to challenge the right of states to regulate gambling on Indian reservations. The cases lingered in court for many years. Some of these cases even reached the Supreme Court. Eventually, Congress passed the Indian Gaming Regulation Act (IGRA) in 1988 to end the confusion.

The three primary purposes of IGRA were to:

  1. Provide a statutory basis for the operation of gaming by Indian tribes as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments.
  2. Provide a statutory basis for the regulation of gaming by an Indian tribe adequate to shield it from organized crime and other corrupting influences, to ensure that the Indian tribe is the primary beneficiary of the gaming operation, and to assure that gaming is conducted fairly and honestly by both the operator and players; and
  3. Declare that the establishment of independent Federal regulatory authority for gaming on Indian lands, the establishment of Federal standards for gaming on Indian lands, and the establishment of a National Indian Gaming Commission are necessary to meet congressional concerns regarding gaming and to protect such gaming as a means of generating tribal revenue.

How it’s Going

Over the years, the tribal gambling industry has shown impressive growth. In 1979, there was only one tribal casino in operation. But by 2020, this number had grown to 525. Tribal casino gaming generated more than $34 billion in revenue in 2019. Between 2009 and 2019, the revenue grew by more than $8 billion.

Tribal casinos have greatly improved the lives of many Tribal members. So far, out of the 574 federally recognized tribes, 245 run gambling facilities. Proximity to urban centers is essential to a successful gambling operation. As a result, many tribes living on isolated land cannot run gambling operations even when legally allowed to do so.

The gambling industry is not immune from systemic problems either. For example, the 2009 economic turndown had a severe effect that the gambling industry had massive layoffs across all departments. Like most businesses, the gambling industry suffered financially during the COVID-19 pandemic and the lockdowns that came with it. Tribal casinos took, on average, a 20% reduction to their revenue.

Tribally-owned casinos giving back to society

Income from casinos finance many charitable activities, provide funds for tribal members, and allow sovereign Tribes to become more financially self-sufficient.  

Tribal Casinos have generated massive value for Tribal communities, non-Indians, and all tiers of government.

Financial Reporting, Accounting, and Auditing Challenges for Tribes

Tribal businesses have grown pillar to pillar for many decades, and the booming variety of businesses being set is an indication of this trend.

However, accounting and financial reporting for Tribal businesses are different than other organizations because of the unique business structure. This blog post will discuss a few challenges specific to Tribal businesses, especially Tribal Casinos.

Financial Reporting

  • Tribal entities are covered under various regulatory acts depending on their business structure, revenue, and other factors. Tribal Casinos must follow the Indian Gaming Regulatory Act 1988, The Bank Secrecy Act, and IRS Sections like IRC Section 6050I, among several others. 

  • Being a cash-heavy business, Tribal Casinos must ensure that the cash flows come from legal sources and that they’re following all anti-money laundering provisions.

  • Tribal entities also might have to choose between FASB and GASB reporting along with reporting on the effectiveness of the internal controls. 

Accounting Issues & Audit Challenges

Tribal businesses must also deal with accounting challenges like:  

  1. Going Concern Assumption
  2. Leases  
  3. Asset Impairment
  4. Cash Management & Expenses
  5. Grants

Going Concern Assumption

Circumstances that directly contradict the Going Concern assumption can arise unexpectedly. Tribal businesses and auditors must stay on guard by keeping an eye on closures of businesses, supply chain disruptions, and acute changes in demand.


Since many Tribal businesses spend a large part of their cash flow on lease commitments, any changes in lease payments, terminations, or extensions need to be validated. Defaults, if any, need to be recorded and disclosed as per the accounting standard. 

Asset Impairment 

The valuation of assets and goodwill on the financials must be re-evaluated and revised in case of impairment. A significant devaluation of assets due to a disruption in the business’s operation may have a considerable impact on the financials. 

Cash Management & Expenses

Tribal businesses are typically cash-based businesses. Capital and revenue expenditures incurred in cash need to be accounted for correctly.

Tribal businesses will need to account for cash spent on employee learning programs, tuition reimbursements, skill upgrades, collaboration with educational institutions, etc. 

Additional costs like personal protective equipment, sanitation costs, non-refundable deposits for canceled events, payment to employees during temporary closures, and others must be accounted for correctly. 


The Treasury has released approximately $39.6 Billion in 2021 as Covid relief funding to various Native American programs. Auditors need to check the terms of such grants and whether the terms are complied with in full.

Wrapping Up

Tribal businesses face some unique challenges regarding accounting, from checking for proper internal financial controls and compliance with GAAP to ensuring that the books present an accurate and fair view of the business.

However, when you work with an accountant who works exclusively with Tribal businesses and understands the business’s nuances, you’ll be in a much better position to tackle these challenges.

The Single Audit

There is an immense increase in Single Audits in 2020, and that’s because Tribal Government expenditures were larger in 2020 than ever in modern history. This is because the Federal Government distributed incredible amounts of funds to Tribal Governments within the Coronavirus Relief Fund (“CRF”). These funds were designed to be used to mitigate the negative effects that the global pandemic had on the Tribal Members of Tribal Governments.

These funds put many Tribal Governments in a scenario that they have never been before, they are required to receive a Single Audit to test their compliance with the use of the CRF amounts. A Single Audit, previously known as the OMB Circular A-133 audit, is an organization-wide financial statement and federal awards’ audit of a non-federal entity that expends $750,000 or more in federal funds in one year.

It is without a doubt that the funds distributed from the Federal Government were an enormous assistance for Tribal Governments nationwide; however, don’t let the Single Audit surprise you.

The best way to prepare is to first create a separate fund within your general ledger for the amounts received and distributed on behalf of the CRF. The expenditures should be closely monitored to ensure the compliance with both your purchasing internal controls and the vague literature describing what these funds can be used for. Document and ensure approval of any changes to your purchasing process as a response to the global pandemic. This can include bidding processes, approval hierarchy, or emergency assistance. You don’t want to make changes to your internal controls without the appropriate approval. Don’t get caught surprised when your financial audit includes a single audit for the first time. Consult with your legal team and accounting team to be prepared and proactive for your audit.

Palm Springs for the week

There are few places hotter than Palm Springs, CA this time of year, and, yet, I have found myself battling this blistering heat twice within the last month. Today, the accounting manager, who we work with told us that it can get up to 116 degrees during the day, and immediately, I wanted to stay in for lunch.

Although the heat may be debilitating for a northwest kind of guy like me, Palm Springs does have a certain appeal to it. There are few places that can pull off not only the relaxed atmosphere of a golf town but also the upbeat vibe of a casino environment, but Palm Springs does it better than almost anyone. The town has a certain attitude that only tourist towns have, the attitude that everyone here has chosen to be here.

We ate at the popular sushi restaurant Okura for dinner, and I was puzzled on whether the packed restaurant was full of tourist or locals, especially considering it was a Tuesday night, and everyone was dressed to impress.

Palm Springs was once the celebrity hide-out, and there were entire communities occupied by A list movie stars that once occupied the area. Since, the celebrities have spread throughout the Coachella valley, but the beautiful, gated communities remain, and as everywhere else – skyrocketed in value in the past year.

There are several Tribal members that call Palm Springs home. The Agua Caliente reservation was established in 1876 and consists of 31,128 acres of land and 6,700 acres are located by Downtown Palm Springs.  The tribe has a strong presence outside of Palm Springs with an enormous and largely profitable casino.

Palm Springs is a wonderful quick experience every time we go; nevertheless, it’s nice returning to the reasonable weather of Reno, NV.

The Wahlberg brothers enter the Tribal Casino Resort business.

The Wahlberg brothers were a huge hit at the Indian Gaming Tradeshow and Convention last week as they disclosed their relationship with the Little River Band of Ottawa Indians. The Wahlberg’s food and beverage franchises will be added as an amenity for guests within the Tribe’s Resort Casinos. This was a big step for the partnership, and, in my opinion, a glimpse into the future of Tribal Casino Resort amenities.  

Venues within Tribal Casinos tend to be managed by an in-house team, which was a topic I covered in a previous blog, “Should Casino’s Manage their restaurants in-house or outsource to a third-party management company?”, but tides are slowly turning. The Wahlberg partnership, and the exposure developed from it, is setting the stage for the transition of an industry. I believe food and beverage outlets will be the first venues to be outsourced, especially considering the difficulties in hiring, recently.

History repeats itself, and if we reflect to the history of the Las Vegas strip, we notice that the Casino Resorts were once completely the management responsibility of the in-house team; however, in time, the restaurants were almost completely outsourced. Then, once outsourced, celebrity chefs were recruited / created, and now, Las Vegas is one of the restaurant capitals of the world.

We will see if the successful exposure of the Wahlberg Tribal Casino partnership at the Indian Gaming Tradeshow and Convention will catch on, and I’m curious to see what trendy food and beverage venue is next.

Although not as trendy, a staple that I think would be successful at several Tribal Casino Resorts is the House of Blues. House of Blues has a unique blend of Live Music, food and beverage, and nightlife that is hard to replicate. House of Blues is also within the Live Nation family, so artist will both perform at locations they wouldn’t previously consider and perform for Live Nation costs, unlike the premium added to Tribal Casino performance quotes.  

Capital Assets Part 1 – Capitalization Threshold

Yesterday, my girlfriend asked me why I like to buy expensive furniture but am conservative in everything else, I told her because I can capitalize furniture. 🙂

Capitalization is a complex topic and can sometimes be difficult to keep track of, especially during large construction projects. The first part of understanding capital assets is understanding the concept of the capitalization threshold.

The capitalization threshold is the minimum cost at which an item is recognized as a capital asset on the balance sheet as opposed to an expense on the income statement.

Capitalization thresholds are determined by regulatory bodies and policies such as GASB 34 and OMB A-133. Organizations can also create their own capitalization thresholds if they are equal to or greater than the regulatory requirements. The Enterprises and Tribal Governments I work with typically use a Capitalization threshold of either $3,000 or $5,000. In my experience, most clients also use aggregate amounts; for example, ten $500 computers purchased under the same order would be capitalized under equipment.

Once the capitalization threshold is established, it is important to either create an excel fixed asset tracking document or implement fixed asset software to keep track of the items that exceed the capitalization threshold. I strongly suggest creating an excel workpaper that is updated at least monthly with new additions in both capital assets and accumulated depreciation, disposals of assets, and transfers of assets from the construction in progress accounts. When the audit comes around, they will greatly appreciate a document that brings everything together.

For Governments (and extra credit with your auditors):

An issue that I’ve noticed several times this year is items being added to the fixed asset listing, but not being recorded as capital outlay on the general ledger. It is important to remember that capital asset additions should be recorded as capital outlay, instead of non-capital outlay expenditures. Although there will not be no impact on your net position, finding each capital outlay amount at year end can be a time-consuming exercise.

The capital outlay amounts are required to do the conversion entry reconciling your fund statements to the government-wide statements. Without the appropriate amount recorded as capital outlay, the two Governmental Financial Statements will not reconcile.

*The above is the fundamentals of a capitalization threshold. Fixed Assets are highly complex. Below are some great videos / articles to understand better.

The trials and tribulations of eating “healthy” on the road.

I travel a lot. In fact, last semester of business school, I traveled 10 out of the 12 weeks for work. It’s no secret that constant travel requires a lot of work to maintain a healthy lifestyle. The eating out, lack of available gyms, and stationary lifestyle of “life on the road” can be daunting for someone who cares about their health (hopefully all of you).

There is no substitute to healthy habits at your home-base, but I’ve learned a few tricks on diet in attempting to beat the life on the road extra pounds. I am no nutritionist, and I could definitely be better at practicing what I preach; however, I hope this is a good starting point for your life on the road dietary goals.

Call your hotel ahead of time.

  • Call your scheduled hotel reservation ahead of time and ask if the rooms have both a microwave and refrigerator. These two simple kitchen appliances are key to a somewhat healthy diet on the road. It’s the difference between a hot meal, chilled veggies, or a week’s diet consisting of grains and nutrition bars.  

Pack a spork and a “camping” bowl.

  • You can find both these cooking tools at REI. A spork is a fork and spoon combined for an individual eating utensil. A reusable spork and “camping” bowl are important to have for your different meals throughout the week. Both should be both easy to pack and easy to clean. These two handy items will assist with your breakfast, lunch, and dinner. Breakfast and Dinner will most likely be in the hotel room; however, the spork and “camping” bowl should be easy to transport for lunch at the client.

Have grocery shopping list on the notes section of your cell phone.

  • You should have your grocery go-to items, as an easily accessible checklist on your phone. Items shouldn’t be by brand because there is a large chance you will replace the brands based on the closest grocery store to your hotel.
  • Here is my shopping list for a five-day, including breakfast, snack, lunch, and dinner:
    • 6 pre-made salad chicken packs
    • Pack of 3 ready rice
    • Soy Sauce
    • 6 nutrition bars
    • 1 container of peanuts
    • 2 salad bags
    • Salad Dressing (balsamic vinaigrette)
    • 4 peanut butter small packs
    • 2 packs of pre-made eggs
    • 2 bananas
    • 2 apples
    • 1 big bag of popcorn.
    • Tea

Wash your spork and “camping” bowl immediately after your meals.

  • There is nothing worse than a dirty spork and bowl a day after dinner. The soy sauce is almost impossible to remove to its entirety, and the reality that you’re eating like a camper, while all the restaurants can be expensed, becomes a cold reality. It’s best to make the experience of eating healthy as seamless as possible.

Let me know if you have tips, or better shopping items below! I would love to know additional secrets to the extremely difficult act of staying healthy on the road.

The quaintness of Oklahoma, and the monumental case that is shaking the state.

Oklahoma has a polite stillness that is virtually impossible to replicate. This morning, as we drove to our client from our hotel in Fort Sill, Oklahoma, we were stuck behind a tractor for most of the 20-minute commute; however, unlike my typical response to traffic, unsavory, I was fine with it. I enjoyed observing the farms in action, the open calm space, and a side of America I don’t get enough of. In fact, I even confided into my coworker that I sometimes ignorantly overlook this aspect of our country, which is a majority of the land.

Despite the southern charm, Oklahoma has a storm brewing. There is a generational lawsuit that is redefining not only native rights but also the state of Oklahoma.

Back story

Oklahoma is well known for being the destination of one of America’s most devastating blemishes, the Trail of Tears. The Trail of Tears was the act of displacing approximately 60,000 American Indians from their tribal lands throughout the south and mid-west to reservations, located in Oklahoma, in and around 1839.

Following the devastating Trail of Tears and years of unfavorable lawsuits, American Indian lands had been restricted to a unique scatterplot of reservations throughout the state. As one Oklahoma Tribal Member shared with me, “There is a dollar store and competing Tribal Casino on every corner”. This may be an exaggeration, but it is evident that competition is strong within the state; however, the non-organic home of many American Indian tribes is molding into something new.

Current story

In July 2020, the Supreme court ruled in the McGirt vs. Oklahoma case that approximately half of Oklahoma was Tribal Lands. This case is seen as one of the most far-reaching cases for American Indians in the U.S. courts in decades. The case implies that either tribal courts or federal courts are responsible for jurisdiction in these areas. Not only legal responsibilities but now the approximately 1.8M people who live on these lands have just switched their governance accountability from state to tribal.

The transition to Tribal Lands is a large victory for Oklahoma tribal leadership, but with the victory comes large responsibilities and decisions. If ever there was a time for Oklahoma tribal governments to show strength in unity, the time is now. There are important questions that need to be answered, as related to jurisdiction, state tax revenues, and infrastructure, and the world is watching.

Indian Gaming Tradeshow & Convention is July 19-22, 2021. Here are two booths you should visit and one vendor that should be there, but isn’t.

Don’t worry, this is not a paid advertisement.

CasinoTrac is an incredible technology. Most of our clients in the south / mid-west already know this, but I think CasinoTrac is an important part of the future of the gaming business.  I recently messaged CasinoTrac for their training manuals because I’m under the impression that many of our clients will be transitioning to this IT software / hardware within the next couple years. The technology assists in both ensuring internal controls of operations and completing reconciliations of your General Ledger accounts. There are few technologies that I’m blown away by, but CasinoTrac is definitely one of them.

Another reason I think CasinoTrac is outstanding, is because it can produce data analytics to assist management in appropriately budgeting. The amount of data that CasinoTrac records, it is inevitable that it can transition to artificial intelligence in the future; however, for now, I thoroughly like auditing a casino client that utilizes this resource.

CasinoTrac Website

The other booth to check out is ours, BlueBird CPAs! I won’t be there but stop by to say hello to our amazing team. 🙂

BlueBird CPAs Website

Finally, one vendor that I believe should be there but isn’t  is UrVenue. UrVenue is a resource I used at both MGM properties and Grand Sierra Resort and Casino; it is also used at Wynn Properties.  It became the standard for nightlife venues, and within the past 5 years spread to pools, Live Entertainment Venues, and most recently, the VIP section of Allegiant Stadium in Las Vegas.  This software creates 3D online illustrations of your venue and provides a resource for customers to buy tickets to specific locations. It sets up at your host stand, so you can greet guest by name, and collect the appropriate CRM information to stay in touch. This software is unparalleled when it comes to useability, and it is growing in functions rapidly.

UrVenue Website