An operator in Bangkok got a letter from the tax authority last year requesting documentation for his arcade’s revenue and expenses over the past three years. He had basic accounting records but nothing specifically related to security or anti-cheat measures. The tax auditor asked about “unexplained revenue variances” and whether he had documentation to support his claim that some revenue loss was due to theft rather than underreporting. He didn’t. The audit took six months, cost him $3,000 in accountant fees, and resulted in a $12,000 tax assessment that he eventually appealed and reduced to $4,000 — but only after providing additional documentation that he scrambled to collect.
The experience taught him a lesson that every arcade operator should learn before they need it: security records aren’t just for catching cheaters — they’re for proving your business integrity to tax authorities, insurance companies, and regulators. The records you keep today determine whether you survive an audit, win an insurance claim, or pass a government inspection tomorrow.
The Records You Should Keep: A Complete List
Here’s the comprehensive list of security and anti-cheat records that every arcade operator should maintain. I’ve organized them by purpose so you know why each record matters and when you’ll need it.
Revenue and Variance Records
Daily credit-to-cash reconciliation. Every day, for every machine, record: machine ID, opening credit counter, closing credit counter, credits earned, cash collected, and variance (cash minus credits). This is your primary defense against accusations of underreporting. If a tax auditor questions your revenue, show them your daily reconciliation logs. They prove that you’re tracking every dollar and that discrepancies are documented, not hidden.
Weekly variance summary. Compile the daily data into a weekly summary showing total variance per machine and total variance for the arcade. Track trends over time. A weekly summary helps you spot problems early and provides a high-level view that auditors and inspectors can understand quickly. I recommend creating a simple spreadsheet with one row per week and one column per machine.
Monthly revenue report. Summarize your weekly data into a monthly report showing total revenue, total variance, variance percentage, and any anomalies or incidents. This is the document you’ll show to tax authorities, insurance companies, and regulators. Keep 36 months of monthly reports — most jurisdictions require 3 years of financial records, and some require 5-7 years.
Incident log. Document every cheating incident you detect or suspect. Include: date, machine ID, suspected method, evidence (photos, signal analysis, witness statements), actions taken, and outcome. This log serves two purposes: it helps you track patterns and improve security, and it provides evidence that revenue losses were caused by theft, not underreporting. One operator’s incident log helped him reduce a $15,000 tax assessment to $2,000 by proving that documented theft accounted for most of his revenue variance.
Machine and Security Records
Machine inventory. A complete list of every machine in your arcade: manufacturer, model, serial number, purchase date, purchase price, current location, and current status. Update this quarterly. This inventory is required for insurance claims, tax depreciation calculations, and regulatory compliance. It also helps you track which machines are most vulnerable and which have been protected.
Anti-cheat installation records. For every machine with anti-cheat protection, keep: module model, module serial number, installation date, installer name, installation certificate, and warranty information. These records prove that you took reasonable steps to protect your business. They’re also required for warranty claims if a module fails. Keep both digital and physical copies.
Maintenance and service records. Document every service call, repair, and maintenance activity for each machine. Include: date, technician name, work performed, parts replaced, and machine status after service. These records help you distinguish between revenue loss caused by cheating and revenue loss caused by machine malfunction. They also support warranty claims and help you track machine reliability.
Security camera footage archive. If you have security cameras, maintain an archive of footage for at least 90 days. Some jurisdictions require longer retention periods — check your local regulations. Organize footage by date and camera location so you can quickly find relevant recordings. Digital storage is cheap — a 2TB hard drive stores months of footage from multiple cameras. The footage you don’t think you need today is the footage that saves your claim tomorrow.
Staff and Training Records
Staff training log. Document all security-related training for your staff. Include: training date, topics covered, staff members present, and trainer name. Topics should include: recognizing suspicious behavior, responding to cheating incidents, cash handling procedures, and machine security checks. These records demonstrate to inspectors and insurers that you have a systematic approach to security management.
Cash handling procedures. Document your cash collection, counting, and deposit procedures. Include: who collects cash, when, how it’s counted, who verifies the count, and how it’s deposited. If you use dual-person verification (two people count the cash together), document that. These procedures protect you against accusations of employee theft and demonstrate financial controls to auditors.
Incident response procedures. Write down your step-by-step process for responding to a cheating incident. Include: who to notify, how to secure evidence, when to contact authorities, and how to document the incident. Having written procedures shows that you take security seriously and that your responses are systematic, not improvised.
How Long to Keep Each Type of Record
Retention requirements vary by jurisdiction and record type. Here are my recommendations based on typical regulatory requirements and practical experience.
Revenue and variance records: Keep for 7 years. Tax authorities typically audit 3-5 years of records, but some jurisdictions allow audits going back 7 years. Insurance claims can reference historical data going back several years. Monthly revenue reports and variance summaries should be kept indefinitely — they’re your long-term business performance record.
Daily reconciliation logs: Keep for 3 years. These are detailed operational records that support your monthly summaries. You don’t need daily logs going back 7 years, but you should keep them for at least the current year plus 2 prior years. If you’re facing an audit or claim that references a specific period, retain the daily logs for that period until the matter is resolved.
Machine inventory and installation records: Keep for the life of the machine plus 3 years. These records support warranty claims, insurance claims, and tax depreciation. If you sell a machine, keep the records for 3 years after the sale in case of disputes.
Security footage: Keep for 90 days minimum, longer if required by local regulations. Some jurisdictions require 6 months or 1 year of footage retention. Check your local requirements. For footage related to a specific incident, keep it until the incident is fully resolved (insurance claim closed, legal matter settled, etc.).
Staff training records: Keep for 3 years after the staff member leaves. These records support compliance claims and defend against negligence allegations. If a staff member is involved in an incident, keep their training records until the incident is fully resolved.
Digital vs Physical Record Keeping
Both digital and physical records have advantages. Here’s how to use each effectively.
Digital records are essential for searchability and backup. Use a cloud-based spreadsheet or database for your daily reconciliation, weekly summaries, and machine inventory. Cloud storage provides automatic backup and access from multiple devices. Use descriptive file names and folder structures so you can find records quickly. “2024-03-15_Daily_Reconciliation.xlsx” is better than “DR.xlsx.”
Physical records provide legal weight. Some jurisdictions require original signatures on certain documents. Physical copies of installation certificates, warranty documents, and incident reports are harder to dispute than digital copies. Keep physical records in a dedicated filing cabinet organized by category and date. Make digital backups of physical records by scanning them.
Hybrid approach is best. Maintain digital records for daily operations and physical records for legal documentation. Scan physical documents and store them digitally as backup. Print critical digital records (monthly summaries, incident reports) and store them physically. This gives you the advantages of both formats while protecting against data loss.
Frequently Asked Questions
Q: What if I haven’t been keeping these records?
Start today. You can’t retroactively create records, but you can start maintaining them now and build a compliance history going forward. If you’re facing an audit or claim and don’t have historical records, gather what you do have and supplement it with whatever documentation you can reconstruct (bank statements, supplier invoices, maintenance receipts). Be honest with the auditor or adjuster about your record-keeping practices. Most will work with you if you’re making a good-faith effort.
Q: Do I need an accountant to maintain these records?
No. Most of these records are operational, not financial. Daily reconciliation, variance tracking, and incident logs can be maintained by you or your staff using simple spreadsheets. Monthly revenue reports can be compiled from your daily data without accounting expertise. However, if you’re facing a tax audit or complex insurance claim, an accountant who understands gaming operations can be invaluable. They know how to present your records in a way that auditors and adjusters accept.
Q: How much time does record keeping take?
Daily reconciliation: 15-20 minutes per day for a 20-machine arcade. Weekly summary: 10 minutes (just compiling the daily data). Monthly report: 20 minutes. Incident logging: 5-10 minutes per incident. Machine inventory updates: 30 minutes per quarter. Total time commitment: approximately 30 minutes per day during operations, plus 1-2 hours per month for summary reports. This is a small investment compared to the time you’ll spend scrambling for documentation during an audit or claim.
Q: Can software automate record keeping?
Yes, and I recommend it for larger operations. Arcade management software can automatically track credits, cash, and variance. Some systems integrate with anti-cheat modules to log security events automatically. For small arcades (under 20 machines), manual spreadsheets are sufficient. For larger operations, automation reduces errors and saves time. Look for software that exports data in standard formats (CSV, Excel) so you can easily share records with auditors and insurers.
What to Do Next
Start with the daily credit-to-cash reconciliation. Create a simple spreadsheet with columns for machine ID, date, opening credits, closing credits, credits earned, cash collected, and variance. Fill it out today for yesterday’s data. Do it again tomorrow. After one week, compile a weekly summary. After one month, compile a monthly report. This simple habit, maintained consistently, creates a documentation foundation that will protect you in any audit, claim, or inspection. The Bangkok operator who survived his tax audit told me the same thing: “I wish I’d started keeping these records from day one. It would have saved me six months of stress and $3,000 in accountant fees.” Don’t wait for an audit to start documenting — start today.