Your Questions About Casino Chips Answered – Microchipping, Legal Tender, and More

By Randy Ray in Casino
| March 16, 2020 4:07 am PST
Everything You Need to Know about Casino Chips

The gaming public has an insatiable curiosity about everything to do with the gambling industry. Every question imaginable is asked and answered.

Visiting a casino — especially for the first time — instills a sense of adventure in most people. You’re venturing into dangerous territory. The potential gains outweigh the potential risks. This is part of what makes gambling in Las Vegas and other casino destinations such a draw.

What is surprising about gaming tokens is that they represent a third edge for the house. The first edge is the statistical difference between what the house pays winners and your chances of winning. The second edge is the volume of mistakes players make.

How are tokens a third edge?

Every year, tourists take millions of dollars home in the form of unplayed casino chips. Read on to learn about what that means for everyone, as well as a bunch of other topics. Here’s everything you need to know about casino chips.

Are Casino Chips Legal Tender?

Casino chips have a long, interesting history. They also enjoy a few good roaring debates. One of those debates hovers around the question of whether casino chips can be used for money.

In the past, casino chips have been used for money, but was that legal?

Legal tender is mandated by law. In other words, some government must declare tokens to be legal tender — “for all debts public and private” is included on the United States’ printed currency. You won’t find this phrase on coins, but the law includes coins, too.

Legal tender is a government’s way of paying for goods and services. It is considered more reliable than scrip because a government must honor its legal tender or face severe economic consequences. Scrip is treated more like a debt or bond.

Scrips may be issued by anyone (unless forbidden by law) and is used as substitutes for legal tender. Casino chips are scrip, not legal tender. Scrip has economic value as long as someone is willing to accept it as payment for goods or services or in exchange for legal tender.

Years ago, Las Vegas casinos honored each others’ chips, and those chips were often used in place of money throughout Las Vegas. But the state of Nevada passed a law in the 1980s limiting the use of casino chips.

Are Casino Chips Microchipped?

High-value casino chips are indeed microchipped. Casinos take on a lot of risk in issuing chips because they don’t know if people remove the chips from the premises and bring them back later.

In 2007, the Las Vegas Sun ran a story about how the MGM Grand confiscated a $5000 chip because they couldn’t be sure it had been legally obtained. This is the problem casinos have wrangled with for years: how to tell if chips have been stolen or counterfeited.

The Las Vegas Wynn introduced RFID chips in 2005. The chips must be activated to be cashable at the casino, and if a casino needs to replace its chips quickly (as happened in the MGM Grand robbery), the old chips can all be deactivated.

Casinos don’t care about the $5 and $25 chips most players use. They deploy RFID microchip tokens for high-value play, where each chip is worth thousands of dollars.

Manufacturers encode the chips with unique identifiers, but until a casino takes possession of the chips and registers the RFID codes in their database, the chips are worthless. You could play board games with them, and no one would care.

Are Casino Chips Transferable?

Because casino chips are not legal tender, they are not legally transferable. That doesn’t mean some people don’t try to exchange them for cash or chips at rival casinos.

Although the practice was once popular in Las Vegas, the government stepped in to prevent money laundering and counterfeiting. It was too easy for anyone to feed money obtained from questionable sources into the casino system. When they could take the chips across town, there was no way to know where they had been obtained.

Most casinos only accept their own chips now, and they do so only when confident they know where the chips came from.

Visitors to Las Vegas report that some of the casinos occasionally accept small denominations of rival casinos’ chips. If you’re stuck with a few hundred dollars’ worth of chips when you leave a casino, you may be able to exchange them at a nearby casino, but don’t count on it.

If you hear a dealer at a casino call out “foreign chips,” that is a request for someone to come approve and handle the exchange or to politely explain why it won’t happen.

The bottom line here is that no casino is obligated to accept another casino’s chips. They may do so as a one-time courtesy to customers for small amounts.

Can Casino Chips Be Counterfeited?

The short, simple answer is yes. Casino chips can be and have been counterfeited many times.

Most counterfeits are bad copies, according to industry insiders. And as with money, higher-value chips are more likely to be counterfeited than lower-denomination chips.

Counterfeiters may repaint legitimate low-value chips to make them look more valuable. Casinos may accept the chips in play or not. Some dealers are trained to look for fake chips, and some casinos use technology to examine chips.

Someone with skill and the right tools could take a chip from a casino and create a reasonable facsimile, but they cannot embed an RFID chip that is registered in the casino’s database. So even if they can make a perfect copy, if it’s of a chip that is tracked electronically, the counterfeit will be quickly identified the first time it is scanned.

Casino security will look for who passed the fake chip, and things can only get worse from there for the counterfeiter.

Can Casino Chips Be Taken Out of the Casino?

Have you ever been stopped and frisked while leaving a casino?

Yes, you can take chips out of the casino. People do it every day. But the more monetary value you take home with you in the form of casino chips, the less likely you’ll be able to cash them in later.

Casinos accept their own low-value chips without question. But when you come up to the cage with piles of chips or high-value tokens that you cannot account for, they have the right to confiscate the chips.

Casino tokens represent your money. They make it easy to play with and in some ways are safer to carry than money. You won’t get your money back if the chips are lost or destroyed, but some people say you’re less likely to be robbed if you’re playing with chips.

The anti-theft benefit of playing with casino chips is debatable, but they are easier to move around a table than piles of bills and stack very neatly.

The casino wins if you buy chips and then leave with them, never playing them. That’s almost free money for the casino. It’s better than winning at gambling because the house has no risk.

In other words, the house edge on casino chips is almost 100% if you take them home.

What Should You Do With Old Casino Chips?

Despite all the anti-theft and anti-counterfeiting measures described above, old chips may be worth money — until they are not.

Under Nevada law, casinos are required to post public notices when retiring chip designs. They must also follow a specific process for removing old chips from circulation. Old chips are usually returned to vendors to be destroyed.

Casinos rarely retire chip designs. That costs money, and it inconveniences regular players.

On the other hand, some people collect casino tokens just like they collect rare coins and stamps. Casino chips may be given to anyone, but there is no guarantee those people can use the chips when they visit the casinos.

It’s doubtful many chip collections will ever acquire significant value. But you never know. No one knew that Mickey Mantle’s rookie year baseball card would one day be worth a fortune.

What Are One-Time Play Chips?

I’ve only heard of these chips being used in India, but they may be issued by casinos in other parts of the world.

Indian casinos must charge an admission fee to everyone. The fee is paid to the government, so it’s a form of tax.

To compensate the customers for the entry fee, many casinos issue one-time play chips that can be used during that visit to play any games.

These one-time play chips represent a rare kind of gambling transaction — the house always loses. Of course, the government is the only guaranteed winner in these exchanges.

Conclusion

It’s natural to have questions about casino chips. People wonder about the value these tokens hold and where they can be used.

There is the sentimental value we confer upon mementos from our trips and experiences. That cannot be measured, and it is sadly lost when we die, taking our memories with us. But casino chips play an important role in the gambling industry, and if you find one in an attic, you know there is a story behind it.

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  1. Barreras July 25, 2020 at 7:32 pm

    Hey i have a real brastplate helmet shield casino chip 4084176550 how much can i get i have pictures

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