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Question of the Day - 23 May 2021

Q:

Are casino owners allowed to gamble on their own machines?

A:

Assuming you're referring to Nevada, the answer is a qualified "no."

Michael Lawton, our contact at the Gaming Control Board, tells us that casino owners, directors, and officers are forbidden from playing table games and slots and from placing sports bets at their own property or any affiliated one. There are exceptions for poker and off-track pari-mutuel betting, which explains why Jackie Gaughan was a regular fixture in his own poker room at the El Cortez.

Furthermore, regulations state that no race book or sports pool employee may place bets other than on OTB pari-mutuel wagers. And if you’re a key employee of a gaming licensee and want credit in your own house, forget about it. Casinos are forbidden from extending such credit “whether or not such credit is evidenced by a player card, wagering account, or credit instrument.”

As for other states, the only one we can cover with certainty is New Jersey, where a state law bars holders of a key casino employee license from gambling anywhere in Atlantic City.

The owner of the Golden Nugget there found that out the hard way in early 2013. Tilman Fertita was fined $15,000 by New Jersey regulators for playing blackjack at two casinos (not the Golden Nugget). Fertita said he didn't know about the omnibus ban and assumed it was the same as in Nevada, where he can play at any casino except his own (another Golden Nugget).

Some Nevada owners over the years have liked to gamble in other owners' casinos. We know, for example, that Steve Wynn enjoyed shooting craps from time to time. When he owned a mansion in Incline Village up at north Lake Tahoe, he had a $20,000 line of credit at the Hyatt Regency casino there, owned at the time by the Pritzker family of Chicago. On occasion, Wynn liked to stand at the dice table, "trying," as he put it, "to beat the Pritzkers out of their joint." 

 

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Comments

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  • AyeCarambaPoker May-23-2021
    Chicken and egg?
    Isn’t this a chicken and egg situation? 
    
    If a casino owner (for the purposes of this argument let’s say he owns 100% of the casino) plays a negative EV game in his own casino does he lose money? 
    
    There’s obviously the marginal cost of paying a dealer to run the game and the cost of tipping so he loses those but it’s then a case of left pocket, right pocket (I believe those are the correct accountancy terms but feel free to correct me). 
    
    What he makes as a gambler he loses as a casino and vice versa so the better question would be why a casino owner would bother to gamble in his own casino other than just for fun. 

  • Jackie May-23-2021
    why a casino owner would bother to gamble in his own casino other than just for fun
    simple answer.
    to cheat the lawmakers out of tax profits

  • AyeCarambaPoker May-23-2021
    @Jackie
    I hadn’t thought of that but given that Uncle Sam taxes gambling winnings at a lower marginal rate than personal taxation on anything over $500k(ish) I’d think it unlikely 
    
    I’m obviously ignoring the fact that he could just not declare his winnings though! 
    

  • [email protected] May-23-2021
    Pari-Mutual
    The pari-mutual exception makes sense since the bets are going into a commingled pool rather than being booked by the casino.

  • Kevin Rough May-23-2021
    Concerns of cheating
    When Pennsylvania first opened casinos, licensed casino employees weren't allowed to gamble anywhere in Pennsylvania including playing the PA Lottery.  Those rules have since been loosened and now they are only prohibited from playing in their own casino.
    
    The concern is cheating.  Employees could get with their working coworkers and cheat the casino while playing.

  • Bob Nelson May-23-2021
    Owners gambling
    There could be a large “must hit” progressive jackpot that they would rather pay to themselves than a customer.

  • Ray May-23-2021
    the tax angle
    I hadn't thought of the progressive that Bob mentioned, but the only ones that are large enough are usually wide-area, like Megabucks, which isn't a substantial loss to the individual casino. I took the other stance, that it seems that it would be silly to lose money (which he won't be able to deduct) yet have to pay taxes on because his casino won. It doesn't make sense to do that.
    

  • AyeCarambaPoker May-23-2021
    Progressives
    Surely progressive jackpots don’t cost the casino a penny?
    
    My understanding (and I’m more than open to correction here) is that as players play a game, and usually lose, some of their stake goes into the jackpot pool and when the prize is eventually hit the player is winning other players’ money, not the casino’s. 
    
    So a casino owner playing and winning wouldn’t prevent his own casino from having to a different winning player (albeit he would have won some money himself, leading to a tax liability - we seem to be driving this into some sort of infinite circle now!) 
    
    
    Oh - and in my second comment I should have typed “corporate profits being taxed at a lower marginal rate than personal taxation” 
    
    It’s Sunday and I’ve had a couple of beers!! 

  • Brent May-23-2021
    About cheating, not taxes
    The tax angle makes no sense as a reason to keep casino owners from playing at their own shop...unless the owner is cheating to consistently win more than they lose.
    
    So taxes might be a factor, but only because of the possibility of cheating.
    
    A better reason, in my opinion, is that casinos (the non-corporate ones) are often owned by more than one person. If a casino had three owners, for example, the law keeps one owner from influencing employees to cheat for them and thus allow that owner to cheat their partners.
    
    This is also why key employees can't gamble in their own shop---the possibility of influencing employees to cheat for them.

  • Roy Furukawa May-23-2021
    Machines?
    Would a casino owner be at any advantage playing a slot machine in his own house so to speak? I'd think they wouldn't want to be caught at a machine playing those odds.

  • Bob Nelson May-24-2021
    Owners gambling
    I probably used the wrong word.  Was thinking more of a promotion jackpot, not progressive.