Casino Accounting (1 Viewer)

[Ethan]

Do casinos keep 'lost' chips on their balance sheets as current or long term liabilities?

Wait, how do they account for this 'issued currency' in the first place?

 

[Forty4]

I don’t know the exact details but I’ll render a guess. I recall the story of policy regarding Trump’s father buying a significant amount of AC chips and walking out the door with them. He got in trouble by the gaming commission or SEC because they looked at it as a loan.

So I’m guessing there is a petty cash type account that holds the total bankroll. Then like an inventory or petty cash reconciliation with a certain allowance for chippers (although there are plenty of high rollers that keep the chips on site in safe-deposit boxes, to which they might have some way of tracking those chips as well).

So long winded yes it’s probably an asset. If I knew more about banking it would probably follow similar assets/liabilities structure as they do.

 

[davin]

What an awesome question, I always wondered the same thing because a lot of the high stakes players have safety deposit boxes in the poker room it self like the encore, which players keep high denom chips in there. With RFID in sure the boxes has scanners and knows how many chips is in those boxes

 

[gopherblue]

The Nevada Gaming Commission stipulates that a casino must hold in reserve enough cash to cover every chip at play on its floor...That means during the week, by law, it must hold anywhere from sixty to seventy million dollars in cash and coin. On a weekend, between eighty and ninety million. On a fight night, like the one two weeks from tonight, the night we're going to rob it, at least a hundred and fifty million. Without breaking a sweat.

 

[davin]

The Nevada Gaming Commission stipulates that a casino must hold in reserve enough cash to cover every chip at play on its floor...That means during the week, by law, it must hold anywhere from sixty to seventy million dollars in cash and coin. On a weekend, between eighty and ninety million. On a fight night, like the one two weeks from tonight, the night we're going to rob it, at least a hundred and fifty million. Without breaking a sweat.

lol awesome movie

 

[ruskba]

The Nevada Gaming Commission stipulates that a casino must hold in reserve enough cash to cover every chip at play on its floor...That means during the week, by law, it must hold anywhere from sixty to seventy million dollars in cash and coin. On a weekend, between eighty and ninety million. On a fight night, like the one two weeks from tonight, the night we're going to rob it, at least a hundred and fifty million. Without breaking a sweat.

Came here for this, leaving quite satisfied

 

[Tommy]

The Nevada Gaming Commission stipulates that a casino must hold in reserve enough cash to cover every chip at play on its floor...That means during the week, by law, it must hold anywhere from sixty to seventy million dollars in cash and coin. On a weekend, between eighty and ninety million. On a fight night, like the one two weeks from tonight, the night we're going to rob it, at least a hundred and fifty million. Without breaking a sweat.

Another good one...

"You'll need a Boesky, a Jim Brown, a Miss Daisy, two Jethro's, a Leon Spinx, not to mention the biggest Ella Fitzgerald ever."

https://www.pokerchipforum.com/threads/oceans-11-tidbit.14832/

 

[Jeff]

That's a cool question. Do they have a count of their rack every night? Keep track of chips owned, in the cage, not accounted for...

Since the casinos never close, when would you do it? Once a day?

 

[davin]

That's a cool question. Do they have a count of their rack every night? Keep track of chips owned, in the cage, not accounted for...

Since the casinos never close, when would you do it? Once a day?

At the end of my game I count every chip, if there's a missing chip my OCD kicks in and I go crazy, a few times the guys took a few just to drive me crazy because they know
How OCD I am

 

[davin]

Btw I told them no more cash games at my house, chips ended up back real quick and no one pulls that stunt again lol

 

[Poker Zombie]

My guess - yes. The chips are theirs, not the players. The money to purchase the chips is the players, not the casino's.

There might be some non-GAAP accounting used by casino accountants that accepts certain percentage losses so the casino doesn't appear to be in such deep debt, but seriously, who looks at a casino balance sheet and doesn't see a shit-ton of debt? Chips in the wild just may be a part of why they have such massive debts.

 

[justsomedude]

The Nevada Gaming Commission stipulates that a casino must hold in reserve enough cash to cover every chip at play on its floor...That means during the week, by law, it must hold anywhere from sixty to seventy million dollars in cash and coin. On a weekend, between eighty and ninety million. On a fight night, like the one two weeks from tonight, the night we're going to rob it, at least a hundred and fifty million. Without breaking a sweat.

Damn funny post!

And not trying to be snarky, but I was actually just curious, and found the following information. Some pretty interesting tidbits here...

Okay, it’s risky to rely on dialog from Hollywood, and Danny doesn’t know what he’s talking about. Nevada stipulates that casinos must hold 1% of the prior year’s gross gaming revenue plus add ons for each slot, table game or sports book. The add ons will generally double the requirement so a $100 million annual gross gaming revenue casino would need about $2 million, and the biggest casinos more like $10 million. There are other add-ons, but these can be held in bank accounts.

“Fight night” or weekends have nothing to do with it. The Nevada Gaming Commission has an on-line spreadsheet at Bankroll Formula Information so you can put in numbers for whatever casino you plan to rob.

Coin, foreign currency and other money doesn’t count, only US paper cash (unless the casino gets a waiver to use lines of credit, bank accounts, treasury bills or other assets—and many of them do).

However this bankroll requirement is a minimum. The casino will take in cash during play. Also customers will deposit cash, which must be held and cannot be used for the requirement. So on a big night, a casino might have double the legal minimum just before pickup.

 

[ekricket]

Do casinos keep 'lost' chips on their balance sheets as current or long term liabilities?

Wait, how do they account for this 'issued currency' in the first place?

.

Well, they know how many of each denomination they bought. That’s the upper limit. Anything below that why do they care? What matters is the dollars they put in the bank each day. The chips are just s way to expedite money transfers between the house and customers.

I don’t get the deal about considering the chips a loan. If he had to buy them then he had to have the money, and if he took them on a line of credit then there’s no question about it being a loan.

 

[justsomedude]

I don’t get the deal about considering the chips a loan. If he had to buy them then he had to have the money, and if he took them on a line of credit then there’s no question about it being a loan.

The chips weren't the loan... the payment for the chips is what was considered the illegal loan, as the casino used the funds to make its bond payments.

The lawyer, Howard Snyder, approached the casino cage and handed over a certified check for $3.35 million, drawn on Fred’s account. Snyder then walked over to a blackjack table, where a dealer paid out the entire amount in 670 gray $5,000 chips. The next day, the bank wired another $150,000 into Fred’s account at the Castle. Once again, Snyder arrived at the casino and collected the full amount in 30 more chips.

That let Trump use the de facto loan in whatever way he needed. “Sure enough, the Castle made its bond payment the day Fred’s lawyer bought the first batch of chips,” Kranish and Fisher wrote. The tactic also had a nice financial benefit. “Not only did he avoid default on the bonds—and the risk of losing control of Trump Castle as a result—but patrons who hold gaming chips normally are not paid interest,” wrote thePhiladelphia Inquirer at the time.

New Jersey’s Casino Control Commission investigated the chip purchase the following year and said it was an illegal loan that broke the state’s rules about casinos receiving cash from approved financial sources.

 

[ekricket]

The chips weren't the loan... the payment for the chips is what was considered the illegal loan, as the casino used the funds to make its bond payments.

Ahh understand now. He was loaning the casino money.

As for players keeping chips in safety deposit boxes I think it’s a tax issue.

Also if someone was to bring in all the outstanding casino chips at once they’d simply either cut them a check or wire funds out of their accounts, no need for suitcases full of cash.

 

[gmunny]

Do casinos keep 'lost' chips on their balance sheets as current or long term liabilities?

Wait, how do they account for this 'issued currency' in the first place?

Great question. I looked up the Wynn 10K and it says the following:

"Casino revenues are measured by the aggregate net difference between gaming wins and losses, with liabilities recorded as customer deposits for funds deposited by customers before gaming play occurs and for chips in the customer's possession"

The Wynn has Customer Deposits listed under Current Liabilities, which makes sense. Basically customer exchanges cash for chips, so my guess is the Casino records a debit to cash and a credit to customer deposit. Customer Deposits would also include funds wired in by the Whales and held in an account in their name.

 

[Jeff]

Great question. I looked up the Wynn 10K and it says the following:

"Casino revenues are measured by the aggregate net difference between gaming wins and losses, with liabilities recorded as customer deposits for funds deposited by customers before gaming play occurs and for chips in the customer's possession"
.

Good information. I wonder how the casino determines chips in the customers possession. That has to be complex since you have cage activity, and activity at all the tables. Starting cash and chips, fills, ending cash and chips.