What happens when you miss a payment
Collecting the Debt
give you any cash, only credit. When you blow $10K
in markers, the casino isn't out $10K until you pay
them back, like a bank or even loan shark is. They
aren't out anything, its all fantasy money. So if they
have to write off a few bad debts, so what, there was
no cash involved. I'd be giving credit to players under
those conditions too.
Quote: FroggerThat's not true at all. The casino could lose on the initial gambling.
Sure they could, you think thats what happens on
most markers, they lose? No, the vast vast majority
of the time the players lose. And so what if they win.
The casino gives out a $10K marker, they aren't out $10K
if the player wins. They're only out the amount he won,
which he would have won anyway without the marker.
People don't take out markers because they're broke
and casinos don't give them to people who are broke.
Its a convenience for the player, thats all.
Quote: FroggerHe may not have played at all without the marker.
You're missing the point. Players with/without markers will lose more often than they win, so it's in the casino's best interest to get them to play.
Quote: EvenBobIts such a win-win for the casino. They never actually
give you any cash, only credit. When you blow $10K
in markers, the casino isn't out $10K until you pay
them back, like a bank or even loan shark is. They
aren't out anything, its all fantasy money. So if they
have to write off a few bad debts, so what, there was
no cash involved. I'd be giving credit to players under
those conditions too.
Sorry, but this is quite naiive. Just because there are only checks involved doesn´t make it fantasy money. If they give you $10k in chips as credit, these are quite real for the casino - even if you cannot cash out without repaying the debt first.
What happens if you put the $10k on roulettes reds and win, and cash out the won $20k ? What happens if you lose and never repay the debt ? In the first case the casino loses $10k, in the second case they lose nothing. Even for such a simple hit&run tactic the fantasy $10k credit turns out to be (a bit less than) $5k very real dollars. And there are better tactics available than just $5k.
Quote: MangoJIf they give you $10k in chips as credit, these are quite real for the casino - even if you cannot cash out without repaying the debt first.
.
You think chips are money? They aren't. Its no more real money
than the script the coal mining companies paid their employees
in the 30's that was only redeemable at the company store. A
marker is not money and you cannot get cash for it.
If I make a $10K bet with you and you win and I don't pay you,
are you out $10K? Are you hurt financially at all? It was fantasy
money, its not real. In fact, its a good example of how money
doesn't exist, its all in our minds. Its an agreement we make
to all go along with. The casino gives you $10K in Monopoly money
and if you lose (to the casino of course) you have to pay them
back in real money. Pretty good deal, huh.
Quote: vert1276pretty good article in Cigar Aficionado(I seem to be the only one who reads this magazine so I post their gambling articles)
Suuure! You read it only for the articles ;)
If you don´t pay my won $10k bet, then yes I´m hurt financially. Because you would most surely have taken my $10k if I had lost.
Quote: MangoJAnd there are better tactics available than just $5k.
There aren't, really. You're thinking of this as an illicit loss rebate, but the catch is that once you've done this once, you'll probably never be able to do it again, and it will severely restrict your gambling in general, so thinking of it in terms of EV alone is probably a mistake.
That's not the issue with the "Monopoly money" "argument," though. As usual, you need to look at it from their perspective, not that of a gambler: for every n chips that go into the rack, n' leave it, in whatever direction. If the casino doesn't get paid on a high enough fraction of the former, whether the meatbag that took them out is a winner or a loser, they end up footing the bill for the latter, so they can't afford to think "it's just bits of plastic," any more than you or I can afford to think "it's just numbers on a screen."
Quote: EvenBob
If I make a $10K bet with you and you win and I don't pay you,
are you out $10K? Are you hurt financially at all? It was fantasy
money, its not real. In fact, its a good example of how money
doesn't exist, its all in our minds. Its an agreement we make
to all go along with. The casino gives you $10K in Monopoly money
and if you lose (to the casino of course) you have to pay them
back in real money. Pretty good deal, huh.
Note to self: never make a bet with this guy
Quote: MangoJ
If you don´t pay my won $10k bet, then yes I´m hurt financially. Because you would most surely have taken my $10k if I had lost.
Not if you didn't pay me. It was a transaction where no money
changes hands till after the event. The casino cannot lose by
making you a play money loan. Why do you think they are so
eager to do it. Its just their predatory nature hard at work.
They have the edge always, at all times.
Quote: MangoJIf you don´t pay my won $10k bet, then yes I´m hurt financially.
I agree that casinos would get hurt if every single player skipped out on a debt, but casinos don't give credit to just anybody. Kinda like credit card companies. As long as the number of deadbeat gamblers/card holders don't get out of hand, the casinos/CC companies aren't going to sweat.
Quote: EvenBobNot if you didn't pay me. It was a transaction where no money
changes hands till after the event. The casino cannot lose by
making you a play money loan. Why do you think they are so
eager to do it. Its just their predatory nature hard at work.
They have the edge always, at all times.
The fact that a casino - as well as all businesses - have an "edge" or a profit expectation doesn't make it any less real money. For that matter, stiffing Bond holders (an "IOU") after the "event" still has a due date where real money is expected. Stiffing a casino is always a loss, as is stiffing any business, just a loss for a business that Bob personally wouldn't mind to see, but that's him. Doesn't matter what business gave you a loan, you're obligated to pay it.
Quote: PaigowdanStiffing a casino is always a loss, .
Its a paper loss, not a real money loss, big difference. I've
owned 3 businesses, I know the difference. You can absorb
a paper loss, it doesn't effect your bottom line like a cash
loss does. An example would be the value of the property
my building is on is devalued 10%. This effects me not at
all cash wise.
Lets say you're a bank and want to make loans. You have a
box and in it is $10mil. So to qualified people you give out
$10mil in loans, and you're out $10mil in actual cash. Now lets
say you're a casino. You're loan box is completely empty.
You can give out $10mil in credit and it costs you nothing.
Try this. Get a $10K marker in Vegas. Only use $5K of it on
your stay and go to the cage and ask for the remaining $5K
in cash before you leave. Report back what happens, after
they stop laughing..
Quote: rxwineI think Evenbob is saying he'd be happy to sign for your marker. There's no risk to Evenbob or to the casino.
Thats pretty much it. A marker is a zero risk loan
for the casino. If you don't pay them it cannot effect
their bottom line because no cash went out the door.
In most states this is not recognized as a collectible
debt, with good reason.
Quote: LarrySIf a casino gives out 10 markers to 10 different people who all go to the same craps tabl. and 7 people lose it all and never pay back the marker, and 3 people win and pay back the marker....please tell us how a casino stays in business....with just this type of "paper loss"
Why do you assume the casino is stupid enough to
give loans to 7 deadbeats out of 10 loans. They
check you just as rigorously as a bank does for your
ability to repay. And if 7 don't pay it back, how much
cash is the casino out? You don't need a calculator,
the answer is zero.
You're looking at this thru the wrong end of the telescope.
Think of deadbeats as a 100% loss rebate - no one on this board is naïve enough to believe as some novice owners are said to that a loss rebate is "safe," but that's basically what you're saying.
Quote: 24BingoNo... you are. Because they're still out the win of the other three, their "paper losses" become real, as you can't see because you're hung up on the player's end of the scope. And why would it have to be the same table, or even the same day? Suppose of the only ten potential deadbeats they lend to in a year, three happen to win, and basically the casino winds up on the wrong end of the edge.
Think of deadbeats as a 100% loss rebate - no one on this board is naïve enough to believe as some novice owners are said to that a loss rebate is "safe," but that's basically what you're saying.
Doesn't matter if it's 70% or 1% of deadbeats. The casino is still out as the player has made a one-way bet with them.
They might be able to take the loss and write it off, but it will still affect their profit/loss balance sheet for the year.
Quote: EvenBob. And if 7 don't pay it back, how much
cash is the casino out? You don't need a calculator,
the answer is zero.
How many casinos do you get to do this at? Take a shot at their craps table, and fail to pay if you lose?
I've seen kids do this in bets. They bet, but if they lose, they say, "oh that was just practice" That's generally called bullshit.
Obviously a casino has to take losses, by why would they want to?
Quote: thecesspit
They might be able to take the loss and write it off, but it will still affect their profit/loss balance sheet for the year.
OK, I'll ask it again. I take a loan of $10K and lose it
and don't pay it back. How much cash is the casino
out?
Please be specific. Don't go into recovery costs of getting
me to pay, thats a separate issue. How many cash dollars
is the casino out for my afternoon of play. Think real hard.
Quote: EvenBobOK, I'll ask it again. I take a loan of $10K and lose it
and don't pay it back. How much cash is the casino
out?
Please be specific. Don't go into recovery costs of getting
me to pay, thats a separate issue. How many cash dollars
is the casino out for my afternoon of play. Think real hard.
Okay, EB, if you've cost the casino nothing, then I assume the chips they lend you must be worth zero.
So, if you win, they wouldn't let you cash out.
Chili Palmer goes to collect a casino debt from a
Hollywood producer played by Gene Hackman.
At one point the producer asks "What happens if
I don't pay?" Chili says "I don't know, they always
pay." The producer says 'seriously, what happens.
Chili says again "They always pay."
Great movie, every scene is memorable.
Quote: rxwineOkay, EB, if you've cost the casino nothing, then I assume the chips they lend you must be worth zero.
.
I've had this conversation on other forums. Its like
most people are confused by it when they're presented
with the fact that its a no risk loan on the casinos part.
They never thought about it. Its just one more way the
casino takes advantage of you, so you try to find silly
ways to justify it to yourself. What if this and what if that.
'What if' and a dollar will get you a McDonalds coffee.
Quote: EvenBobOK, I'll ask it again. I take a loan of $10K and lose it
and don't pay it back. How much cash is the casino
out?
Please be specific. Don't go into recovery costs of getting
me to pay, thats a separate issue. How many cash dollars
is the casino out for my afternoon of play. Think real hard.
As always, you're looking at this from an individual perspective, which isn't how it works.
Think about it this way - what if you'd lost it at the poker table? Then the answer would be "$10,000," since others have got most of your chips (if we're not counting recovery fees, we might as well not count the rake, since they'd be getting that anyway), and they're going to cash them out. Even you couldn't deny that. Similarly, if you stiffed a bookie, if that bookie were responsible, he'd have $9,000 or so of action against you that he'd now have to pay out of pocket. So what makes the casino different? According to you, it's that from your individual perspective, you've gotten unusually behind - exactly the kind of thinking you rail against elsewhere.
Say you're not the only one who's had this bright idea - and why would you be? - a hundred people take out markers for $10,000, all of whom are going to stiff the casino if they lose. Twenty of them go to the cage with $700,000 between them, and the rest walk out broke. How much is the casino out? Half a million, probably with hundreds of thousands in theo on the books.
"But the casino wouldn't let a hundred people do this" - maybe not, but you're all of them at once, along with every other eventuality. Who knows how many of the people who won wouldn't have paid? It's best to assume exactly enough that the number who actually lost was in accordance with the odds, meaning that as a matter of principle, they're out $10,000. Just because you yourself don't have it in your hand doesn't mean they haven't lost it. Just because the money is moved from player to player stochastically rather than directly doesn't mean that it's not real.
Quote: 24BingoJust because the money is moved from player to player stochastically rather than directly doesn't mean that it's not real.
Of course it does! Its not real at all until YOU
pay it back. Up until then it doesn't exist. You
can't see it, you can't produce it, they can't put
it in their books as a loss because they lost
nothing.
The casino is NOT a loan company, they can't
claim lost markers on their taxes because they
aren't OUT anything. If they could claim it as
a business loss, all of a sudden there would be
$50mil a year in uncollected markers.
Its an in-house deal and its only collectible under
the law because the casino run state says so.
And think about this. Once you pay it back, the casino
has to claim it as profit. They can't say 'we made a
loan and he's just paying it back'. There was NO loan,
its all smoke and mirrors.
If you walk up to the craps table with 10k in your pocket, and you decide you are going to steal from the casino. So instead of putting out your wad of cash thats in your pocket...you ask for a marker. You lose it and dont pay it back and walk out with the 10k in your pocket. The casino lost out on taking your 10k that was in your pocket.
So whats the difference between 10k in your pocket and 10k in your checking account. Same scenario. Except your money is not in your pocket....but instead is in your bank account. There is no difference. If you dont pay, the casino lost out the money in your pocket, or the money in your bank account, or the money in under your mattress.
Its a loss....and losses like that affect the bottom linem, and affects the casinos ability to give comps to everyone.
the house advantage by itself does not build billion dollar casinos....its the cash that is generated by the house advantage that pays the bills, the salaries, the electricity, and builds the extravigant structures.
"Free play doesn't cost the casino anything besides the taxes, so we can't lose!"
There was a guy doing marker scams in Vegas with Chinese guys, I think he paid $300 per 10k in credit they could get, and they would flee to China after and the debt was uncollectible for the casino. There are lots of "AP" moves like this, most illegal, some still quasi-legal, all immoral.
Quote: LarryS
If you walk up to the craps table with 10k in your pocket, and you decide you are going to steal from the casino. So instead of putting out your wad of cash thats in your pocket...you ask for a marker. You lose it and dont pay it back and walk out with the 10k in your pocket. The casino lost out on taking your 10k that was in your pocket.
You really have no idea what we're talking about, do you.
But should that same person win, and if the casino decided they were not going to cash the chips...the same people would freak out.
it seems if a person stiffs big business....its all ok....but if big business stiffs an individual its a crime.
If evenbob wins, he collects the winning money.
If evenbob loses, the casino writes it off.
Got it.
Quote: EvenBobOf course it does! Its not real at all until YOU
pay it back. Up until then it doesn't exist. You
can't see it, you can't produce it, they can't put
it in their books as a loss because they lost
nothing.
The casino is NOT a loan company, they can't
claim lost markers on their taxes because they
aren't OUT anything. If they could claim it as
a business loss, all of a sudden there would be
$50mil a year in uncollected markers.
Its an in-house deal and its only collectible under
the law because the casino run state says so.
And think about this. Once you pay it back, the casino
has to claim it as profit. They can't say 'we made a
loan and he's just paying it back'. There was NO loan,
its all smoke and mirrors.
They can't add it to the books because it's already on the books. They gave that money out, less what they were owed for the game, just not to you, and someone's got to pay it back. There are more people on the face of this earth than you and the Big Bad Casino. What you've essentially done is add a constant to the stochastic process by which table games make their money, and you have the nerve to describe this as "risk free." Even if that weren't the case, the "casino run state" would have every right to enforce your contract, even if those chips couldn't be cashed in at all, but you really were playing with play money under a pricey cover.
Or look at it this way - that borrowed $10,000 you lost. What if you tried all afternoon, but you just couldn't lose it? You walk up to the cage, take your winnings, and they're none the wiser. The next day, someone comes in and tries your stunt, and they succeed. Is the casino still out no money? And no matter how much (finite) time you set aside, you always have a chance, however small, of staying ahead. That's their loss, just the same way you yourself know you're playing a losing game. But you're a gambler, and they're a business.
customers run tabs on hard liquor drinks. I had a
file box next to the register with index cards, I wrote
down the drink and they initialed it. They always paid
at the end of the month, some were slow and made
payments.
The debt was uncollectible if they didn't pay, and some
of them were over $500 and that was 30 years ago.
I didn't care because I was out very little money. $500
in hard liquor drinks cost me $68, big deal. It was worth
the risk to let them run a tab. Its all about risk.
Same as the casino, its all about risk. They risk even less
than I did in giving credit, they risk nothing.
Quote: 24BingoWhat if.
All you have are what if's. Nobody has answered my
very simple question. The casino gives you $10K in
credit, you lose and don't pay it back. How much hard
cash is the casino out. Not 'what if' money, not 'if only'
money, actual greenbacks that day.
They took fantasy money and moved it from column A
to column B. Neat. How much actual cash did it cost them,
give me a figure.
Quote: 24BingoNothing? What if you win?
You get to keep whats left after the marker is paid.
What did you think happens. I know all about markers,
my mothers second husband was a degenerate gambler.
That was in the 60's when you know who owned Reno,
where he played.
Quote: EvenBobAll you have are what if's. Nobody has answered my
very simple question. The casino gives you $10K in
credit, you lose and don't pay it back. How much hard
cash is the casino out. Not 'what if' money, not 'if only'
money, actual greenbacks that day.
They took fantasy money and moved it from column A
to column B. Neat. How much actual cash did it cost them,
give me a figure.
Well, if you lost it to poker players, the casino will have to cash those poker players chips that were formerly your "imaginary" money. That's why 24bingo brought that up.
Quote: michael99000This thread says more about Even Bobs experiences in a casino than anything else.
Zing!
Quote: EvenBobAll you have are what if's. Nobody has answered my
very simple question. The casino gives you $10K in
credit, you lose and don't pay it back. How much hard
cash is the casino out. Not 'what if' money, not 'if only'
money, actual greenbacks that day.
They took fantasy money and moved it from column A
to column B. Neat. How much actual cash did it cost them,
give me a figure.
Read the Wiz's thread on "loss rebates" for a more precise answer. You'll always be one "owed loss" ahead of them if you don't bother to pay them back.
Quote: EvenBobNobody has answered my
very simple question. The casino gives you $10K in
credit, you lose and don't pay it back. How much hard
cash is the casino out...How much actual cash did it cost them,
give me a figure.
I do believe that the IRS would say they lost ten grand.
Pretty clear to me.
Quote: MrVI do believe that the IRS would say they lost ten grand.
From where? No money went out the door. It was
moved from column A to column B. No actual loss
occurred. The IRS would say they lost nothing. They
call that 'creative bookkeeping'.
Quote: EvenBobThe IRS would say they lost nothing.
No, Bob.
I believe the IRS would allow the casino to write off ten grand after a certain amount of time, if the marker is not repaid.
According to Malcolm Greenlees book, "Casino Accounting and Financial Management":
Quote: Chapter on Casino Credit
...The gaming done with credit represents between 15% and 19% of the total play in the casino. Out of all of the total marker credit issued, close to 80% was redeemed before the patron left the casino and before the marker was processed through the banking system for payment. This calculation is consistent with the long term hold percentages on most tables games of about 20%. Of the remaining 20% that was processed through the banking system, 87% was collected, with 13% being written off as bad debt"
From what I understand, outstanding chips and tokens are recorded as liabilities.
So, when you take a marker for 10K, the following transaction is made:
Debit A/R (non-cash) m
Credit Token liability (non-cash) m
When you take your token to the cage to settle your marker, your transaction is:
Debit Token liability (non-cash) x
Credit A/R (non-cash) x
At the tables themselves, the revenue is recorded as:
Debit token liability: m - x (non-cash)
Credit: Revenue m - x (non-cash)
Now, if x < m, the casino has made money from you and when you leave the casino, the net entry is:
Debit A/R: m-x (non-cash)
Credit Revenue: m-x (cash)
When you pay off your debt, it's a debit to
DR Cash; m-x (cash)
CR A/R: m-x (non-cash)
If x>m, then you've paid off all of your marker and the remaining entry is
Debit Revenue: x-m (cash)
Credit Cash: x-m (cash)
The casino keeps a record of bad debts as a contra-asset and estimates usually using an allowance method as a percentage of the entire receivables:
Debit: Bad debt expense (non-cash)
Credit: Allowance for bad debt (non-cash)
All the above items are real and appears on the P&L. The revenue is real. if Terry Watanabe takes out a loan for 100M and loses 100M, the casino records the 100 million as revenue when the money is lost, not when the loan is paid. It doesn't wait for the marker to be paid. Once Watanabe filed the lawsuit, an adjustment to bad debts or revenue would need to be adjusted and a note to the financial statement explaining the adjustment be made.
-------------------------------------
Bob writes tabs up for his customers, expecting some of them to go unpaid. He still sold the alcohol and should have recorded all of the revenue from selling the alcohol. If the patron does not pay the tab, it gets written up as a bad debt. He cannot reduce revenue -- the goods were still sold, the inventory reduced, and the Cost of Goods sold recorded.
