Casino Accounting and Financial Management: Second Edition

Chapter 8: Keno Accounting

This chapter consists of a discussion of the accounting for keno games only. Other minor games such as bingo, poker, and race and sports books are considered in chapter 9. Traditionally, keno has constituted a small portion of the total gaming revenues for casinos. According to Nevada revenue reports, it accounts for less than 1% of the total gaming revenue reported statewide, and ranges from a low of .43% on the Las Vegas Strip to a high of 1.76% in the Reno-Sparks area. However, it is an important game historically, and is often justified by casino management as being part of the total gaming product line. Table 8-1 shows the revenue from keno and other games in various areas of Nevada. The origins of keno are ascribed to an ancient Chinese lottery game. It has been in existence for many years and has risen to new popularity levels following its broad reintroduction into Nevada gaming in 1948.1 Keno, as one of the principal miscellaneous games, has an interesting revenue pattern: revenues vary widely, depending upon the physical location of the casino in the state and, to some degree, upon the size of the casino. There are significant individual casino differences in keno revenue, depending largely upon the degree of internal promotion of the keno game in the club and the nature of the casino customers. These differences are shown in table 8-2. It is interesting to note that the difference in win per game is significant for the Las Vegas Strip casinos. The differences between the downtown Las Vegas win per unit and Reno-Sparks win per unit are relatively modest. Among c h a p t e r 8 Keno Accounting Keno 237 casinos overall, there appears to be little difference in the win per keno game based on location of the casino. In recent years, two significant changes have taken place in keno games. The first is the widespread introduction of a stand-alone video keno machine, where the keno number selections are displayed on a video screen. This video game is considered a specialized kind of slot machine and the discussion of the accounting for these machines is covered in earlier chapters. The second major change is the widespread introduction of computerized keno machines, which have eliminated the manual ticket duplication and keno draw procedures which are outlined in the following section. The accounting controls are still valid, even though the detail control procedures over the draw of the balls are often replaced with specific computer control procedures. Figure 8-1 portrays the downward trend in overall popularity of keno in Nevada. Recent innovations in games have only been successful in slowing the rate of decline in the popularity of this game. table 8-1 Keno, Bingo, Poker, and Miscellaneous Games Revenue, as a Percent of Total Revenue Total Revenue Keno Bingo Poker Other Race Sports Total Nevada Statewide Dollars 10,109,954 70,572 4,394 80,641 62,537 90,122 115,651 423,917 Percent 0.70 0.04 0.80 0.62 0.89 1.14 4.19 Las Vegas Strip Dollars 5,090,901 21,742 1,446 43,674 48,046 46,440 52,586 213,934 Percent 0.43 0.03 0.86 0.94 0.91 1.03 4.20 Las Vegas Downtown Dollars 653,746 7,438 2,824 5,808 6,421 3,604 4,980 31,075 Percent 1.14 0.43 0.89 0.98 0.55 0.76 4.75 Reno-Sparks Dollars 1,011,658 17,759 1,794 7,595 4,789 6,527 14,479 52,943 Percent 1.76 0.18 0.75 0.47 0.65 1.43 5.23 note: All amounts are 000’s. table 8-2 Keno Win per Unit Data—Nevada Locations Win per Unit Win per Unit (all casinos) (medium-sized casinos) Statewide 379,419 not reported Las Vegas Strip 517,128 140,667 L.V. Downtown 464,875 not reported Reno-Sparks 487,778 393,545 238 Accounting physical layout The keno game usually consists of a physically separate counter area—a set of windows similar to a bank teller area—where several keno writers are seated. A supervisor and the various devices used to conduct the drawings of keno balls are behind the counter area. The drawing of the balls...