NIGC: Indian Gaming’s GGR Calculation

A sound investment in compliance and collaboration

Collaboration enables the National Indian Gaming Commission (NIGC) to effectively meet its mission. The process leading up to the release of Indian gaming’s annual gross gaming revenue (GGR) is one example of how collaboration can help the NIGC to meet its mission and at the same time support the work of tribal governments and the Indian gaming industry’s record growth.

The NIGC’s release of the GGR for Indian gaming operations is an endeavor that brings together tribal governments, gaming facilities and Indian gaming’s federal regulatory body. It is a proven partnership that results in an annual measure upon which tribal governments, the regulatory community and the public at large can rely for an accurate accounting. It is also a resource that informs the assessment of the industry’s unprecedented health and profitability during recent years.

The fiscal year 2018 GGR is the total amount of money wagered less amounts paid out as prizes at 501 gaming facilities regulated by 241 tribes in 29 states across eight NIGC-created administrative regions in operation during tribes’ 2018 fiscal years. We recently reported the GGR for FY 2018 was $33.7 billion—the highest GGR in Indian gaming’s history. This is a 4.1 percent increase over FY 2017. And, unlike in FY 2017, all eight of the NIGC’s regions showed positive growth in revenue during FY 2018.

The NIGC’s Portland Region (which includes operations in Alaska, Washington, Oregon and Idaho) showed the highest growth with an 8.2 percent increase, followed by the NIGC’s Oklahoma City Region (which includes operations in parts of Western Oklahoma and Texas) with a 7.3 percent increase.

Calculating the annual GGR requires tribes and the NIGC to make an investment of time and resources. Pursuant to the Indian Gaming Regulatory Act as interpreted by the NIGC’s regulations, tribes prepare comparative financial statements covering all financial activities for each Class II and Class III gaming operation at the close of each tribe’s fiscal year. Each gaming operation’s financial statement must be audited and certified by an independent certified public accountant. Independent auditing practices help to ensure the financial statements conform to generally accepted accounting principles. Each tribe then submits to the NIGC the audited financial statements within 120 days after the end of a tribe’s fiscal year.

Once received by the NIGC team, the commission’s subject matter experts review every submission to ensure compliance and accuracy. The NIGC audit team consists of certified public accountants and certified fraud examiners who spend approximately 3,200 hours annually reviewing and analyzing financial statements and the agreed-upon procedures that each independent audit submission outlines.

Both tribes and the NIGC benefit from their investment in calculating the GGR. Tribal governments are responsible for community-wide planning and the expenditure of revenue from Indian gaming operations, and can point to the GGR calculation process as a recurring and widely accepted practice that helps tribes meet this responsibility.

In addition, the NIGC uses the information generated when calculating the GGR, such as independent audit reports, to help anticipate where it might prepare for and make the most of the commission’s impact through enforcement, training and technical assistance efforts. Analyzing information from each tribe’s annual financial submissions in order to plan for future NIGC compliance activity is especially important in light of the Indian gaming industry’s ever-evolving environment.

The NIGC audit team’s more than 3,200 hours of financial reviews are integrated into the NIGC’s local and national level assessments. This coordination tailors how the NIGC conducts its site-specific assistance, revises and updates the NIGC education efforts, and helps identify tribes who would benefit from an internal control assessment by the NIGC or other NIGC compliance work.

In addition, the audit team’s insights provide an opportunity for the NIGC to dialogue with tribal regulatory bodies and the private accounting community about the impact of auditing practices and federal regulatory requirements across Indian gaming’s diverse landscape.

Informed, efficient and flexible annual submission requirements encourage compliance, which in turn increases the value of the GGR calculation and analysis processes for both tribes and the NIGC. To ensure robust tribal reporting and participation continue every year, the NIGC staff is engaging tribes though training and technical assistance to promote best practices around maximizing independent auditor engagements. In addition, an examination of a tribe’s internal audit procedures is part of the annual site visits performed by NIGC staff at each Indian gaming operation. And where applicable, the commission also considers reducing certain audit requirements when such a reduction will not undermine the accuracy of a tribe’s submission and can reduce the financial burden on smaller operations.

While the GGR’s annual reporting continues to tell a positive story about Indian gaming’s economic success and ongoing contribution to a strong economy, it also tells the story of how collaboration among the governmental and regulatory communities has built a strong reputation for reliability and integrity. That reputation has been a catalyst for economic enterprise to create a foundation for employment and business development that extends to vendors, the entertainment sector, retailers and beyond. It is a foundation that provides unparalleled economic opportunities in some of the most under-served areas in the United States.

During the coming year, we will continue to look for opportunities to promote NIGC’s collaboration with tribes—whether in the calculation of the GGR or in other areas of responsibility—as a means to increase the NIGC’s contribution to a well-regulated industry. And we will remain grateful for the work of our many partners and NIGC experts who collect and analyze important industry trends like Indian gaming’s annual GGR.