Utilizing the accrual method of accounting, respondent's practice was, at the end of each fiscal year, to enter the total of the progressive jackpot amounts as an accrued liability on its books, and from that total to subtract the corresponding figure for the preceding year to produce the current tax year's increase in accrued liability. A Nevada Gaming Commission regulation prohibits reducing the indicated payoff without paying the jackpot. The amount of the jackpot increases as money is gambled on the machine, until the jackpot is won. In addition to paying fixed amounts when certain symbol combinations appear on their reels, these machines have a 'progressive' jackpot that is won only when a different specified combination appears. Respondent, in its gambling casino in Reno, Nev., operated a number of 'progressive' slot machines.
