Casino Accounting Procedures
Once limited to Nevada and New Jersey, casinos are now finding their way into cities all across the country. According to Forbes.com, casino revenue in America exceeded 90 billion dollars in 2009. A key component of efficient casino management is an accurate accounting regimen. Casino accounting procedures can be broken down into a series of logical steps.
Keep a constant tally of the drop. The total amount of currency exchanged by customers into casino chips or tokens is termed the "drop". Cash intake at the drop phase does not constitute revenue or profit. Remain cognizant that the drop is simply an exchange of currency for playing chips, and understand that the casino has a future cash liability to redeem outstanding chips still within their customers' possession. The drop total is a good metric to gauge overall casino customer traffic.
Keep an ongoing calculation of the casino's "handle". The handle is the total amount of wagers made by the casino's customers. Retain statistics showing how the handle is allocated between the various gaming activities offered by the casino. Data that breaks out the handle derived from slot machines versus table games such as blackjack can prove valuable when making strategic casino management decisions. Logically, the handle should at least equal the drop as the casino's customers purchased chips or tokens with the intent of gambling as opposed to immediately redeeming them back for cash.
Calculate the casino's win or loss from gaming on a daily basis. Slot machines most often come with built-in win/loss calculation software, whereas table games must be manually tracked. Use the calculation of the drop minus the total of chips and tokens cashed back in by customers as a check on the accuracy of the win or loss figure. Keep in mind that outstanding playing chips still in the possession of the casino's players represent a cash liability on behalf of the casino.
Add the casino's gaming win or loss together with other revenue sources such as from drinks, food and parking fees in order to calculate total revenue. Tally the total operating expenses of the casino, including all applicable categories such as payroll, utilities, security and advertising expense. Subtract this expense number from the total revenue calculation in order to derive the casino's EBITDA (earnings before interest, taxes, depreciation and amortization). Subtract from this EBITDA number any applicable interest paid on loans, federal and state taxes paid, depreciation of assets or amortization of purchases in order to yield the casino's net profit figure.