If You Collect or Sell Casino Chips, Are You Breaking Federal Law?

I saw a sign Saturday in the Wynn: “Federal law prohibits the use of the casino’s tokens and state law prohibits the use of the casino’s chips outside the establishment for any monetary purpose whatsoever.” As I read it, anyone selling chips/tokens on eBay or elsewhere is breaking federal and/or state law. Is that correct?

Nope. But as always with gambling questions, it can get complicated.

We know for sure that the law states you can’t use the chips as instruments of currency. In other words, you can't use them to buy a Coke at the mini-mart, or pay the electric bill, or even deposit them in the collection plate at church.

(This didn't used to be the case back in the day when casino cheques were de facto legal tender throughout Nevada. The historic Guardian Angel Cathedral, just off the Strip on E. Desert Inn Rd., accepted chips as donations and it was the job of the "chip monk" to go up and down the Strip redeeming those that had found their way into Sunday’s offering basket.)

What about tipping the dealer or cocktail waitress with chips? According to the letter of the law, it's not allowed.

Yes, this comes as a surprise to many Vegas visitors, especially those who have always tipped cocktail waitresses, in particular, with the coin of the casino realm.

According to point 4, paragraph 12.060, of the Nevada State Gaming Control Board's Regulation 12 governing casino chips and tokens, "A licensee shall not accept chips or tokens as payment for any goods or services offered at the licensee's gaming establishment, with the exception of the specific use for which the chips or tokens were issued, and shall not give the chips or tokens as change in any other transaction."

In other words, neither patrons nor the casino can use chips in lieu of money other than for the specific purpose for which they were made at the gaming tables.

The same regulation states, "Chips and tokens are solely representatives of value which evidence a debt owed to their custodian by the licensee that issued them and are not the property of anyone other than that licensee."

That is, chips are only a symbolic representation of the actual money with which you buy in and cash out; they're the physical property of the casino and don't belong to you and therefore aren't yours to give away as a toke to the cab driver, the stripper at the club he drives you to, the bellman who delivers your luggage, or even the cocktail waitress. They're not to be used in the casino gift shop or spa, or anywhere else, for any other reason, at any time, other than for their specific gambling purpose.

All that said, cheques still move in many directions. We've all toked dealers and cocktail waitresses on the casino floor with them. And after living here for a long time, we can tell you that casino chips of $100 or less are just as good as cash and are used as such on occasion outside the casino. Also, casino chips have been collectibles for decades; a major chip-collectors club meets every year in Las Vegas to buy, sell, and trade them.

Distinguished Fellow in Gaming Law (University of Nevada-Las Vegas) Anthony Cabot tells us, “Collecting chips is different than using them as currency. They are not purchased to be used as a means to exchange for goods or services, but for hobby or related purposes. This would not violate federal law.”

Michael Lawton, senior research analyst at the Control Board, agrees. He writes, “The Nevada Gaming Control Board is not aware of any law prohibiting the sale of chips from an active or closed casino. The sign [at the Wynn] is a law that prohibits the use of chips or tokens as monetary instruments outside of the casino.”

Of course, in the real world, no one seems to object or even know (until now) that it's "wrong." Indeed, since the chips cost a fraction of their face value to produce, casinos love when players take them home to collect them; that way, they don't have to redeem them for cash and they make a big profit on them, especially at the higher denominations.

Also, compared to the other violations in the casino environment the powers that be must concern themselves with -- cheating, theft, armed robbery, underage gambling/drinking, money laundering, prostitution, drug dealing, counterfeit-currency passing, etc. -- this particular infraction doesn't seem to register too high on the enforcement radar and we've yet to hear of a single instance of someone being prosecuted for tipping with, or accepting as a tip, a casino chip.

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Comments

Edward Press May-02-2019

2-4 limit poker

For years my wife and I would stay at the Flamingo and play table games early in the day and then settle in to the poker room for 3 or 4 hours and play and  enjoy the poker room. There were always 2-4 limit games in progress. Now it seems almost all the strip hotels do not offer 2-4 limit holdem games! They have all been raised to 3-6!! Only the locals casinos offer 2-4. I still see 2-4 at the Orleans and the Palms but most of the strip casinos have eliminated them. What is up with that?

O2bnVegas May-02-2019

Made my day

"chip momk."  For sure the best laugh I've had in a while.  Thanks!

Kevin Rough May-02-2019

Two comments

1. The second time that I was in Vegas back in 2009, I sat down at a blackjack table at Binion's.  I pulled out a black chip which I thought was a Binion's chip but it was a Four Queens chip.  The dealer was able to exchange it at the table as she told me that they were owned by the same company.  She laid it on the table as a dealer would normally do with a $100 bill and then put out $100 worth of red chips.  She announced it like a normal buy-in and the pit boss never said a word.

2.  I swear that the old Sahara had a service at the cage where people who get tips could cash in all the oddball chips instead of making stops all over town.  Plus they charged a small commission for the service.

Jackie May-02-2019

@ed

It's always about money.  Two things could be possible.  The players on the strip wanted 3-6 instead of 2-4, otherwise not enough 2-4 players to seat a game.  Or.  The house rake in a 3-6 game is greater than a 2-4 game which equates to higher dealer pay. However, Deke may come up with a third option.

Flaxx May-02-2019

Dissenting opinion

There are several questions raised by this discussion. First, if chips are mere "representatives of value," are they not akin to an IOU or a marker? The possessor of the marker may not "own" it per se, but is free to give or trade it away because such activities do not constitute a "monetary purpose" under the statute. (You can profit from something without that thing serving a monetary purpose.) You may not use them to pay for groceries, but if you're not specifically paying for something, then you're not using it for monetary purposes. Second, note the phrase "A licensee shall not accept chips or tokens as payment ...." Are dealers accepting a toke really acting as an agent of the licensee (the casino)? I would argue they are not, and are thus free to accept tokens as tips. Third, dealers (and cocktail waitresses, and massage people, etc.) are not taking these "outside the establishment" so why would that part of the statute be operative anyway?

Question of the Day - 02 May 2019

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