Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

3.INCOME TAXES

A reconciliation between income taxes computed at the statutory federal income tax rate and the effective tax rate is as follows:

	2012	2011
Federal tax expense at statutory rates	$ 668,602	$ 357,935
Nondeductible lobbying expense	102,332	179,263
State expense, net of federal impact	155,738	114,799
Stock option expense	22,862	28,942
Other	578	(25,857)
	$     950,112	$     655,082

Income tax expense for the years ended December 31, 2012 and 2011 consists of the following:

	2012	2011
Current
Federal	$864,576	$533,847
State	250,136	16,171
	1,114,712	550,018
Deferred, primarily Federal	(164,600)	105,064
	$        950,112	$655,082

Deferred income tax expense differs from the actual change in the net deferred tax liability in 2011 due to a federal net operating loss carryback.  The Company recovered approximately $257,236 in federal taxes paid in a prior tax year in November 2011. 

Deferred income taxes reflect the available tax carryforwards and the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2012 and 2011 are as follows:

		2012		2011
Deferred tax assets
Vacation accrual		$ 68,800		$66,900
Player rewards program accrual		252,700		224,400
Stock options		259,700		143,800
Net operating loss carryforwards		-		25,200
Other		103,600		38,300
Total deferred tax assets		$ 684,800		$498,600
Deferred tax liabilities
Tax depreciation greater than book depreciation	$ (1,410,000)		$(1,388,400)
Deferred gain on sale of land	(104,000)		(104,000)
Total deferred tax liability	$(829,200)		$(993,800)

The Company is subject to U.S. and Minnesota taxation.  The Company is no longer subject to U.S. federal, state, or local examinations by tax authorities for years before 2008.