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Promotional Allowance Comps
• Promotional allowances (complimentaries or “comps”) represent goods and services which would be accounted for as revenue, if sold, that a casino gives to customers as an inducement to gamble at its property. • Examples include rooms, food, beverage, entertainment, and/or gifts. In addition, promotional allowances include slot club bonus points and bonus play dollars. • On a consolidated level, a reclassification entry is required in order to present the comps as a “contra” to the gross revenue presented on the consolidated statements of operations. The rooms, food and beverage, and other comps are reclassified from each of the department’s income statements into the contra revenue account, “Promotional Allowances.” • Question: would the casino’s bottom line improve if no comps ? • The net effect of comps on the overall casino/ resort financial presentation is $0 as the revenue reported includes comp revenue and the comp expense (promotional allowance) reduces the revenue. • However, not having comps would negatively affect the gaming floor and gaming overall revenue.
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