On Free Play and Tribal Gaming Taxes

Main Article Content

Ashok K. Singh


There are a total of 243 Native Indian tribes which collectively have 512 tribal casinos. A majority of tribal casinos offer loyalty cards and free play, and many tribal casinos spend millions of dollars per year on this form of marketing. Tribal operators argue that the full face value of all free-play offers should be considered a marketing expense, but taxing authorities in many states are not in agreement, and argue that some percentage or all of Free Play should not be considered an expense item by the casinos. In this article, we provide a very brief history of tribal gaming, explain how Free Play affects house advantages and other performance indicators of casino slot floors, include a discussion on the structure of state taxation in the U.S., and also show how tribal casinos in different states stack up in terms of gross gaming revenue and taxes. 

Article Details

Author Biography

Ashok K. Singh, University of Nevada, Las Vegas

ProfessorDepartment of Resorts, Gaming, and Golf Management


American Airlines. "American Airlines AAdvantage Program Details". Retrieved 26 July 2018.

American Gaming Association (2016). State of the States.

https://www.americangaming.org/sites/default/files/2016%20State%20of%20the%20States_FINAL.pdf. Accessed 8 August 2018.

Armon, R. (2015). Ohio lawmaker wants casinos, racinos to pay taxes on promotional credits.

https://www.ohio.com/akron/news/top-stories-news/ohio-lawmaker-wants-casinos-racinos-to-pay-taxes-on-promotional-credits. Accessed 13 August 2018.

Barker, J. (2015). In varying amounts, casinos dole out millions on 'free play'.


Accessed 13 August 2018.

Barsky, J. and Tzolov, T. "The Effectiveness of Casino Loyalty Programs - Their Influence on Satisfaction, Emotional Connections, Loyalty and Price Sensitivity" (2010). Marketing (Formerly Marketing and Law). 1. https://repository.usfca.edu/ml/1. Accessed 11 June 2018.

Black, K. (2009). Business Statistics: Contemporary Decision Making. John Wiley & Sons, page 189.

Blow, P. D. (2018). Casino Players Club Cards: Why You Should Have One, and How to Use it.

http://paulblow.tripod.com/casino-club-card.html. Accessed 13 August 2018.

Briggs, J. B. (2001). Retrieved on 7/12/2018 from

https://web.archive.org/web/20070813232911/http://www.joebobbriggs.com/vegasguy/vg20011016.html. Accessed 12 July 2018.

Brunt , C.D.(2015). Racino ‘free play’ tax issue left up to courts. https://www.abqjournal.com/599739/racino-free-play-tax-issue-left-up-to-courts.html. Accessed 4 March 2017.

Cantrell, J. Free Play Accounting.

https://www.mygamingandleisure.com/articles/freeplay-accounting/ Accessed 13 August 2018.

Joiner-Congleton, C. and Horne, E. (2012). How much is Your Casino Investing in Players? White Paper, www.Stics.com.

Friend, M. (2018). The History and Future of Loyalty Programs http://www.futureofbusinessandtech.com/business-solutions/the-history-and-future-of-loyalty-programs. Accessed 26 July 2018.

Forrest, D. (2013). An economic and social review of gambling in great britain, The Journal of Gambling Business and Economics. Vol. 7, No. 3.

Greenlees, E.M. (2008). Casino Accounting and Financial Management.

University of Nevada Press, pp. 79-80.

Gruetze, M. (2012). Slot fans, casinos in midst of 'golden age of free play'.

https://triblive.com/x/pittsburghtrib/ae/gambling/s_790232.html#axzz3h8gj4BFZ. Accessed 13 August 2018.

Gruetze, M. (2017).Pa., W.Va. casinos reducing amount of free slot play.

https://triblive.com/aande/gambling/12657369-74/pa-wva-casinos-reducing-amount-of-free-slot-play. Accessed 13 August 2018.

Hannum, R.C. (2013). A Primer on the Mathematics of Gambling. Chapter 20 of the Oxford Handbook of the Economics of Gambling, Editors: Leighton Vaughan Williams, Donald S. Siegel, Oxford University Press.

Hendler, F., & LaTour, K. A. (2008). A qualitative analysis of slot clubs as drivers of casino loyalty [Electronic version]. Cornell Hospitality Quarterly, 49(2), 105-121.

Hobica, G. (2016). Why it’s time to rethink frequent-flier programs. https://www.usatoday.com/story/travel/columnist/hobica/2016/11/29/frequent-flier-programs/94544522/ Accessed 24 July 2018.

Klebanow, A. (2009) "Customer reinvestment analysis in the gaming industry", Worldwide

Hospitality and Tourism Themes, Vol. 1 Issue: 4, pp.386-391, https://doi.org/10.1108/17554210911002228

Las Vegas 4 Newbies. Slot machines and video poker.

https://www.lasvegas4newbies.com/chap10-2.html. Accessed 13 August 2018.

Larose, D.T. (2014). Discovering Knowledge in Data: An Introduction to Data Mining, Chapter 10. John Wiley & Sons.

Leenheer, J., van Heerde, H.J., Bijmolt, T.H.A. and Smidts, A, (2007). Do loyalty programs really enhance behavioral loyalty? An empirical analysis accounting for self-selecting members. Intern. J. of Research in Marketing 24 (2007) 31–47.

Lucas, A.F. and Spilde, K. (2017). The Free-Play Tax Deduction Debate: How Academic Research Can Help. UNLV Gaming Research & Review Journal, Volume 21 Issue 1,

pages 25-41.

Lucas, A.F. and Kilby, J. (2008). Principles of casino marketing. Okie International, Inc., Norman, OK.

Lucas, A.F., Singh, A. K., and Gewali,L. P. (2007). Simulating the Effect of Pay Table Standard Deviation on Pulls Per Losing Player at the Single-visit Level. UNLV Gaming Research & Review Journal, Vol. 11, pp. 41 – 52.

Rosen, C. (2000, October 30). Harrah's bets on loyalty program. InformationWeek (810), p. 153.

Pilaski, M. (2015). Do slot machines go cold when you’re given free play?


Repetti, T. (2011). Recent Research Trends in the Gaming Industry: A Content Analysis of Research Literature on Casino Profits. UNLV Gaming Research & Review Journal, 15(2).

Rowell, D. M. (2010). "A History of US Airline Deregulation Part 4 : 1979–2010 : The Effects of Deregulation – Lower Fares, More Travel, Frequent Flier Programs". The Travel Insider.

Rubinstein, R.Y. and Kroese D.P. (2011). Simulation and the Monte Carlo Method. John Wiley & Sons.

Sharp, B., Sharp, A, (1997). Loyalty programs and their impact on repeat-purchase loyalty patterns. Intern. J. of Research in Marketing 14 (1997) pages 473-486.

Suh E., Tanford, S., and Singh, A.K. (2012). The indirect gaming contributions of cash and comped casino dining: Does providing complimentary meals pay off at the slots? International Journal of Hospitality Management, Volume 31, Issue 4, December 2012, Pages 1303-1310.

Schaap, J. I. (2010). The Growth of the Native American Gaming Industry: What Has the Past Provided, and What Does the Future Hold? American Indian Quarterly. Vol. 34, No. 3, pp. 365-389.

Sum, A. Khatiwada, I., McLaughlin, J. & Palma, S. (2010) The Great Recession of 2008-2009 and the Blue-Collar Depression, Challenge,53:4, 6-24, DOI: 10.2753/0577-5132530401

Walker, D.M. and Jackson, J. D. (2013). Casinos and economic growth: an update. The Journal of Gambling Business and Economics 2013 Vol 7 No 2 pp 80-87

Weisberg, S. (2013). Applied Linear Regression, John Wiley & Sons.

Winship, T. (2011). Airline Frequent Flyer Miles, 30 Years Later. https://abcnews.go.com/Travel/airline-frequent-flyer-miles-30-years/story?id=13616082. Accessed 12 July 2018.