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Contracts and Poker: Chips and Cash

by Scott J. Burnham |  Published: Jun 30, 2021

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A player who is running low on chips in a ring game pulls a couple of $100 bills out of his pocket and puts them on the table. In hands dealt after that, does the cash play?
Someone once said, “The man who invented poker was smart, but the man who invented the poker chip was a genius.”

Psychologically, we don’t think of chips as real money, which can be a good thing. In theory we should play poker the same way no matter what the markings are on the pieces of clay in front of us.

In one of my favorite poker books, Big Deal, Tony Holden finds himself musing during the play of a hand, “Should I just call the rent or should I raise my son’s tuition?” He realizes at that moment that he will never be a professional poker player, because he has thought of the chips as real money.

But legally, are chips the same as money?

Viewers who welcomed the return of High Stakes Poker this season were disappointed to see that one feature had changed since the series was last seen. There are no longer “bricks” of rubber-banded $100 bills being tossed around. In the intervening years, most casino companies – including MGM, which owns the Aria, where High Stakes Poker is played – have banned cash at the poker tables, presumably because of concerns about money laundering.

The cash bricks raised an interesting rules question in season 3 of Poker After Dark. After Eli Elezra went broke on the first hand, he rebought for $20,000, which was in the form of two $10,000 bricks. Fifteen minutes later, he had both chips and cash, including one of the bricks, on the table.

Before the flop, he raised to $1,100, pushing out all of his chips. Mike Matusow called. On the flop, Elezra bet $1,000, putting out ten $100 bills. Matusow raised to $2,500 and Elezra called by putting out fifteen $100 bills that were wrapped with a band. On the turn, Matusow bet $2,500.

Elezra tossed out his $10,000 brick without saying anything. Matusow insta-mucked, believing Elezra had raised. Elezra explained that he had only called, and everyone quickly jumped on Matusow for not knowing the rule.

As Howard Lederer explained it, “He tossed in an oversized call.” Matusow later acknowledged that he had made a mistake.

But did he?

Lederer seemed to think that the “oversized chip” rule applied. According to that rule, if the bet is $2,500 and a player puts out a single $10,000 chip without saying anything, then it is a call. But if the player had put out one hundred $100 chips without saying anything, it would be a raise.

So, is the brick the equivalent of one $10,000 chip or is it one hundred $100 chips?

Clearly if there had been no band around the bills, it would be the latter. Does the rubber band turn it into one chip? I’m not so sure that the band is meaningful – after all, on the previous street, Elezra had put in fifteen $100 bills with a band around them, but no one claimed it was a bet of $10,000.

In any event, we won’t have to worry about that problem at the table arising again. The banning of cash marks one more step down the road of separate treatment of cash and chips.

It used to be that chips were treated as legal tender in Las Vegas, with casinos accepting each other’s chips and settling accounts later, and with gamblers freely using chips to purchase goods and services. But no more. When you “buy” chips at the cage, you are not even buying them in the sense that you own them. After you pay for them, they still belong to the casino – the “licensee” in the language of the Nevada State Regulations – and you are their “custodian”:

12.060 Use of chips and tokens.

1. 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.

Technically, only the person who obtained the chips from the casino can cash them, which is an indirect way of saying that if you use them to purchase goods or services, the person you transferred them to can’t cash them in. You may have run into this problem when you received your tournament winnings in chips and the cage would not cash them without some proof that you personally won them from the casino.

That rule states:

4. A licensee shall not redeem its chips or tokens if presented by a person who the licensee knows or reasonably should know did not obtain the chips or tokens directly and lawfully from the licensee’s gaming establishment.

Does that mean you can’t toke a dealer or server with a chip? Not surprisingly, there is an exception that allows the casino to redeem chips presented by “an employee of the licensee who presents the chips and tokens in the normal course of employment.”

So in most casinos in Las Vegas, the rule now is that cash on the table does not play. If you are playing elsewhere, it will be up to the individual casino. Make sure to ask the floor or dealer whether cash plays. It looks like the answer will more frequently be, no. ♠

Scott J. Burnham is Professor Emeritus at Gonzaga University School of Law in Spokane, Washington. He can be reached at profburnham@yahoo.com.