Question of the Day - 14 May 2015

WSOP bracelet winner and Kill Phil author Blair Rodman answers.

In June 2014, the Treasury Department's Financial Crimes Enforcement (FinCEN) Director Jennifer Shasky Calvery addressed the issue of money laundering at casinos and stated that it was up to casinos to implement stricter financial policies to ensure that their premises are not used for money laundering purposes. Although I haven't heard any official reason for the rash of casino companies suddenly going to a "cash doesn't play" policy, some financial analysts feel it's likely that it’s a result of pressure from FinCEN. It's a sign of the times, as government intrusion becomes more a fact of daily life in the U.S.

As of now, the treatment of cash play on table games isn’t mandated by any law or rule that I know of, but rather by almost universal in-house casino policy that money be exchanged for chips. While I don’t see the difference between a "money plays" bet – where a winner is paid with chips and a loser results in the cash being stuffed into the drop box – and simply exchanging money for chips at the outset, the latter method has been employed for several years now (the change seems to have been made following the 9/11 attacks). It’s not 100% applied, however, as I’ve spoken with players who’ve had cash bets accepted as recently as this year. What’s brought this situation to the forefront is the recent extension of the policy to live poker games in MRI and Wynn properties.

While it seems intuitive that this would be a major issue with poker players, it's really not. In fact, I think most players are in favor of the policy. Some considerations:

• The rule makes it easier to know how much a player has on the table, an important consideration in "big bet" no-limit and pot-limit games. Chips are much easier to count than cash, so players don't have to constantly ask opponents how much they have in front of them, saving time and aggravation.

• It helps alleviate "ratholing" (also known as "going south"), the practice of taking money off the table while still in the game, which is against the rules. An interesting example of this came up on a "High Stakes Poker" episode, when the players were (probably) jokingly accusing Freddy Deeb of taking chips off the table. His extreme reaction illustrated how much this practice is looked down on in the poker world. Say a player buys into a no-limit game with $500, wins a big pot to give him $1,500, and would like to free-roll by sneaking $500 into his pocket and playing with the rest. Since most players would take their cash with them when taking a break from the table (a wise move, regardless), it would be easy to pocket some bills before returning to the game. With chips, this would be much harder to do without it being noticed.

• Counting out stacks of bills is much more time consuming than using chips, especially in bigger games with a lot of bills in play. A lot of times players would keep their bills in packets of $5,000, which often wouldn't be broken down and counted, and occasionally would be discovered to be short a bill or two at some point after the game.

• Casinos are a common place for counterfeit bills to be passed. Using chips puts a damper on that, as they have to pass inspection at the cage.

Are there negatives? Sure. Some players feel that having to get chips might cause a losing player to leave the game, or buy fewer chips than if he were able to just pull out a wad of bills and throw them on the table (as I’ve often seen frustrated players do). That’s a bit cutthroat, but poker isn't a compassionate game. High-limit players might be opposed to the hassle of buying large-denomination chips and the accompanying paperwork that entails. And, of course, many people resent the government-induced intrusion and question whether terrorists are really trying to launder money in poker games. (On the other hand, I wouldn’t mind it, as I suspect they would be pretty bad players!)

Given that the policy has been in place for casino pit games for a while without any major fallout from customers, I assume it will also transition easily in poker. From what I understand, FinCEN is currently working on a number of policies that will further scrutinize large financial transactions at casinos. One such policy could force casinos to reveal the financial sources of their VIP and high-stakes clientele. If such a policy does get implemented, it will certainly reduce the risks of money laundering but at a cost of adversely affecting the revenue of many casinos.