FASB Hits the Jackpot Question

While casinos are only a small percentage of U.S. business, an update to an accounting rule on jackpots brings a welcome degree of uniform practice to accrual accounting.

Contributor Robert Willens, founder and principal of Robert Willens LLC, writes a weekly tax column for CFO.com.

Footnotes
1 See Thor Power Tool Co. v. Commissioner, 439 US 522 (1979).
2 See Nightingale v. United States, 684 F.2d 611 (9th Cir. 1982). The court, however, disagreed.
3 The regulations provided that “…no payoff indicator shall be turned back to a lesser amount, unless the amount by which the indicator has been turned back is actually paid to a winning player….” The court noted that this regulation is “strictly enforced.” By statute, Nevada authorizes the gaming commission to impose severe administrative sanctions, including license revocation, upon any casino operator that wrongfully refuses to pay a winning customer a guaranteed jackpot.
4 See Helvering v. Russian Finance & Construction Corporation, 77 F.2d 324 (2nd Cir. 1935).

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