In accordance with the new revenue standard requirement, the disclosure of the impact of adoption on our condensed consolidated statements of income and condensed consolidated balance sheets at and for the period ended March 31, 2018 are as follows (in thousands):


	Three Months Ended March 31, 2018 As Reported		Loyalty Point Impact (1)		Promotional Allowance (Discretionary Comps) Impact (2)		Promotional Allowance (Point Redemptions) Impact (2)		Reimbursable Expense - Casino Rama Impact (3)		Racing Revenue Impact (4)		Balances Without Adoption of ASC 606		Effect of Change Higher / (Lower)
Income Statement

Revenues
Gaming	$	654,494	$	(1,419)	$	33,639	$	-	$	-	$	-	$	686,714	$	(32,220)
Food, beverage, hotel and other		130,969		(69)		-		6,624		-		8,960		146,484		(15,515)
Management service fees		2,438		-		-		-		-		-		2,438		-
Reimbursable management costs		28,184		-		-		-		(21,844)		-		6,340		21,844
Revenues		816,085		(1,488)		33,639		6,624		(21,844)		8,960		841,976		(25,891)
Less: promotional allowances		-		-		(33,639)		(6,624)		-		-		(40,263)		40,263
Net Revenue		816,085		(1,488)		-		-		(21,844)		8,960		801,713		14,372

Operating expenses
Gaming		340,516		(1,027)		-		-		-		-		339,489		1,027
Food, beverage, hotel and other		92,980		-		-		-		-		8,960		101,940		(8,960)
General and administrative		121,263		-		-		-		-		-		121,263		-
Reimbursable management costs		28,184		-		-		-		(21,844)		-		6,340		21,844
Depreciation and amortization		60,390		-		-		-		-		-		60,390		-
Impairment losses		618		-		-		-		-		-		618		-
Insurance recoveries		-		-		-		-		-				-		-
Total operating expenses		643,951		(1,027)		-		-		(21,844)		8,960		630,040		13,911
Income from operations		172,134		(461)		-		-		-		-		171,673		461

Income from operations before income taxes		61,126		(461)		-		-		-		-		60,665		461
Income tax (benefit) provision		15,689		(118)		-		-		-		-		15,571		118
Net income	$	45,437	$	(343)	$	-	$	-	$	-	$	-	$	45,094	$	343

As a result of the adoption of the new revenue standard, the following areas resulted in significant changes to the Company’s accounting:

(1)

The new revenue standard changed the accounting for loyalty points earned by our customers. The Company’s loyalty reward programs allow members to utilize their reward membership cards to earn loyalty points that are redeemable for slot play and complimentaries such as food and beverage at our restaurants, lodging at our hotels, and products offered at our retail stores across the vast majority of the Company’s casino properties. Under the new revenue standard, the Company is required to utilize a deferred revenue model and defer revenue at the estimated fair value when the loyalty points are earned by our customers and recognize revenue when the loyalty points are redeemed. The deferred revenue liability is based on the estimated standalone selling price of the loyalty points earned after factoring in the likelihood of redemption. Prior to the adoption of the new revenue standard, the estimated liability for unredeemed points was accrued based on expected redemption rates and the estimated costs of the service or merchandise to be provided.

(2)

The new revenue standard changed the accounting for promotional allowances. Under the new revenue standard, the Company will no longer be permitted to report revenue for goods and services provided to customers for free as an inducement to gamble as gross revenue with a corresponding reduction in promotional allowances to arrive at net revenues. The new revenue standard requires complimentaries related to an inducement to gamble to be recorded as a reduction to gaming revenues, and as such promotional allowances provided to customer’s as an inducement to gamble is no longer netted on our condensed consolidated statements of income.

In addition, the new revenue standard changed the accounting for promotional allowances with respect to non-discretionary complimentaries (i.e. a customer’s redemption of loyalty points). Under the new revenue standard, the Company is no longer permitted to report revenue for goods and services provided to a customer resulting from loyalty point redemption with a corresponding reduction in promotional allowances to arrive at net revenue, as the new revenue standard requires the utilization of a deferred revenue model in which previously deferred revenue is recognized as revenue when the loyalty points are redeemed. As such, promotional allowances related to a customer’s redemption of loyalty points is no longer netted on our condensed consolidated statements of income.

(3)

The Company revised its accounting for reimbursable costs associated with our management service contract for Casino Rama. Under the new revenue standard, reimbursable costs, which primarily consist of payroll costs, must be recognized as revenue on a gross basis, with an offsetting amount charged to reimbursable management costs within operating expenses, as we are the controlling entity to the arrangement. Prior to this revision, the Company recorded these reimbursable amounts on a net basis.

(4)

The new revenue standard changed the accounting for racing revenues. Under the new revenue standard, we concluded that the Company is not the controlling entity to the arrangement(s), but rather functions as an agent to the pari-mutuel pool. As such, fees and obligations related to the Company’s share of purse funding requirements, simulcasting fees, tote fees, certain pari-mutuel taxes and other fees directly related to the Company’s racing operations must be reported on a net basis and included as a deduction to food, beverage, hotel and other revenue. Prior to the adoption of the new revenue standard, the Company recorded these fees and obligations in food, beverage, hotel and other expense.


	As Reported At March 31, 2018	Balances Without the Adoption of ASC 606	Effect of Change Higher (Lower)
Balance Sheet

Other assets
Deferred income taxes	388,058	386,271	1,787

Current liabilities
Accrued expenses	134,312	123,078	11,234

Shareholders' (deficit)
Retained deficit	(1,016,031)	(1,007,175)	(8,856)

The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” were as follows (in thousands):


	Balance at December 31, 2017	Adjustment Due to ASU 2014-09	Balance at January 1, 2018

Balance Sheet

Other assets
Deferred income taxes	390,943	2,044	392,987

Current liabilities
Accrued expenses	125,688	11,694	137,382

Shareholders' (deficit)
Retained deficit	(1,051,818)	(9,650)	(1,061,468)