This way lies madness. Casino "chips" are more properly called "cheques" … except when they’re not (as in the poker room). However, Nevada Gaming Regulation 12 addresses "chips and tokens," making no reference to cheques. There is a five-point criteria for the manufacture of chips and tokens, including "An exact drawing, in color or in black-and-white, of each side and the edge of the proposed chip or token, drawn to actual size … showing the measurements of the proposed chip or token in each dimension."
The only point of agreement we found when we asked around, is that everybody disagrees to some extent about the cheque/chip/token distinction. MGM Resorts International spokesman Alan Feldman summarizes the chip/cheque discrepancy as follows: "Chips and cheques are legally interchangeable. ‘Cheques’ are usually used in non-U.S. casinos, but mean the same as ‘chips.’ Tokens are generally used in slot machines, although some tokens also are used at blackjack tables to pay off uneven blackjack bets."
Agreeing and elaborating, Raving Consulting President Dennis Conrad (a former casino dealer) says, "Checks and chips are the same thing, clay or plastic currency used on the tables, mostly. They can also be non-negotiable chips for promotional marketing, or collectibles for use on the tables or sale* at the cage as souvenirs. Tokens are minted coins, formerly used in slot machines (probably still are at a few old-time joints). They can also be used as commemorative collectibles for sale or as gifts."
Heather Ferris, who teaches casino dealing online and assists Mike Shackleford with the WizardOfOdds.com site, offers a more nuanced explanation: "The difference between a casino cheque and a chip is that the ‘cheque’ is worth monetary value, while the ‘chip’ has no monetary value. For example, if you are on a blackjack table and you gave the dealer money for your chips, then those ‘chips’ are now ‘cheques’ because they have monetary value," as opposed to when they were just sitting in the rack a few moments ago.
"‘Chips’ have no monetary value. An example of this are the colored roulette chips. If you take these chips to the cashier's cage, they are not worth anything. They are only worth something if you exchange them at the roulette table you were playing at for actual cheques." Ferris adds that "’Tokens’ or ‘Tokes’ are cheques given to the dealer as a tip, or ‘token of gratitude’ which is where the name originated from."
In addition to having specific dimensions, the name of the casino, the value of the chip, and the manufacturer’s name or logo must all be visible on the cheque. The differing denominations must be differentiated in design in such a manner as to be discernible by the "eye in the sky." Baccarat cheques must have a different diameter than those for other casino games, and the same holds true for any chips issued by the sports book. Similar requirements are in place for tokens, although these are to denote denomination, right down to the number of serrations on the edge. Even their metallic composition is mandated by statute.
Almost needless to say, cheques are not negotiable as currency, although we have heard of Las Vegas churches redeeming chips that found their way into the collection basket. Tokens cannot be used at slot routes unless the route is owned by the holder of a non-restricted gaming license. If a gaming operator chooses to retire certain denominations of chip or token, he must advertise this fact "in at least two newspapers of general circulation … at least twice during each week of the redemption period." Promotional chips are subject to most of the same rules as regular cheques but must be inscribed with "No Cash Value."
(Peripheral to our discussion are casino plaques. These playing-card-shaped instruments are only brought into play for very high denominations and are marked with serial numbers, unlike cheques.)
Casino tokens, as mentioned, are made of metal and usually come in $1 denominations, as their rise paralleled the decline in the supply of silver dollars. Now that the vast majority of casinos have gone to cashless slot machines, they are largely an anachronism, of more value to collectors than players, the exception being collectible "Silver Strikes" or "Silver Premium Tokens," the higher denominations of which contain actual silver.
Casino cheques, by contrast, are manufactured from a compound that includes sand, chalk, even the kind of clay you put in your cat’s litter box. The inserts around the edge are either manually or mechanically inserted and the whole shebang is baked at 300 degrees. A century after clay-based cheques became standard casino equipment, in the 1980s, ceramic chips were introduced. These had the advantage that the name of the casino, the denomination, and the manufacturer’s logo could be printed across the entire chip, not just in the inlaid sections.
The newest wrinkle in cheque manufacturing is the embedding of radio-frequency-identification (RFID) tags in casino chips. Not only does this enable the house to monitor the movement of cheques across the casino floor, it can remotely deactivate the RFID tag rendering the chips non-negotiable: Bellagio used the latter technique to foil a chip scam after a helmeted gunman had robbed the casino floor of $1.5 million worth of cheques. (To be extra careful, Bellagio retired the chips in use on the floor and replaced them with a "secondary set" -- a duplicate but distinct backup set that always exists for use in such scenarios).
RFID chips are less costly than you might expect, averaging around $2.50 apiece to make. (According to Shackleford himself, "I think it costs around $1.50" to make a non-RFID chip. "This might explain why poker rooms are not eager for you to leave with their $1 chips.") RFID cheques, according to Singularity University blogger Aaron Saenz, "can log how much you spend, where you spend it, and use that information to keep you in the game longer with well-timed drinks and services catered to your activity. If you’re using high-rolling chips you can almost guarantee that a casino knows what you’re up to." Wynn Las Vegas was the first casino to employ RFID chips, in 2005.
Although the chip-making industry keeps abreast of the times, counterfeiters aren’t necessarily easily spotted. In 2005, two Henderson men were arrested and found to have a chip-making factory in their basement, after casino cashiers noticed dubious-looking $100 and $500 cheques. However, the two men accused, Jeremy Lewis and Erick Morikawa, were said to have already won $50,000 playing with their homemade cheques.
In January 2014, convicted cheat Christian Lusardi tried to scam the Borgata Winter Poker Open. Fearing that his bring-your-own counterfeit no-cash-value tournament chips might be discovered, he scurried back to his room at Harrah’s Resort, and flushed 500 chips down the toilet (not counting 22 he deposited in a Borgata toilet). Not surprisingly, Lusardi’s ‘royal flush’ clogged the pipes at Harrah’s, so in addition to a five-year prison sentence and a restitution fine of $463,540 to Borgata for disrupting its tournament, Lusardi was obliged to pay Harrah’s for $9,455 in ruined plumbing.He’s going to have to make a lot of license plates to retire those debts.
When Caesars Entertainment employees discovered the source of the problem, they contacted Borgata, where 160 Lusardi-made chips were found to have been played, nullifying the first round of the tourney. So while a counterfeiter might get away with it in the short run, in the end, the house always wins.
[*On this point we must correct Dennis, since the sale of chips is actually a violation of gaming regulations, but it's a more-than-forgivable error that we've covered in the past and will be revisiting imminently in the context of Chinese New Year, so stay tuned!]
