Gold Coast Hotel & Casino (Gold Coast) (plaintiff) was a licensed gambling casino in Nevada. To promote its slot machines, Gold Coast offered a slot-club reward program to its customers. Slot-club members were able to earn points as they played on slot machines within Gold Coast’s casino. To collect a prize, members needed at least 1,200 points. Gold Coast was obligated to allow members to redeem this qualifying amount of points upon request. The stipulated market value of each point was $0.0021. When paying its taxes, Gold Coast used the accrual method of accounting. Gold Coast would deduct the market value of unclaimed points earned by members in the current year who had an ending point balance of greater than 1,200. Gold Coast would then report income from the market value of unclaimed points earned by members who had an ending point balance of greater than 1,200 but had not gained any points in over a year. The commissioner of internal revenue (commissioner) (defendant) proposed adjustments to Gold Coast’s income from slot-club points. Gold Coast filed a complaint against the United States government (defendant) in federal district court, challenging the commissioner’s adjustments. The district court granted Gold Coast’s motion for summary judgment. The defendants appealed.