Currency arbitrage fail

I went to Caesars Windsor in Windsor, Ontario to earn a checkpoint for the "Great Race promo." I finished my play, and ended up with $200 CDN on me that I needed to change back to U.S $.

The exchange rate currently in the casino is $100US=$99CDN and $100CDN=$97US. That's nowhere near fair, but fine. I understand the casino is going to take a vig. The spread is 4% which is pretty reasonable. I still didn't feel too good about losing $4 out of every $100 I change for the privilege of gambling in their casino.

Entering the line for the casino cage, I see an old woman clutching two U.S. $100's, waiting to change them in at the cage. I approach her and ask, "Can I buy that $200 U.S. off of you with Canadian at par? The cage will only give you $99 for it."

She looks at me like I am an alien who has just stepped off of Deep Space Nine. I repeated, "The casino takes 4% of every transaction. I'll give you more than they will give you, and we'll both come out better." She shakes her head no. I press. "Why not?"

"I don't understand," she says, and moves towards the window, where she dutifully hands over her $202 U.S. to get $200 CDN to put in the slot machines. ARRGGH! I felt like shouting at her like Jimmy Fallon at the baby in those Capital One commercials: "But it's MORE MONEY! Who doesn't like MORE MONEY, you stupid old crone!"

Can we just start a Wizard republic where everyone makes optimal E.V. gambling decisions, airline seats don't recline, traffic merges in a perfect zipper, and all lines are Wendy's style?

Quote: teddys

Can we just start a Wizard republic where everyone makes optimal E.V. gambling decisions, airline seats don't recline, and all lines are Wendy's style?

Of course we can.

But the civil war for the reclining seats will leave millions dead. I'm afraid that's how the world works :P

I feel your pain, but she could have been worried that you were trying to pass counterfeits...

Counterfeits are a serious point here. You could probably arrange the deal on the condition that the cage inspect all of your bills. The cage might grudgingly accept to scan them, especially if you offered the clerk $1 tip.

I think the cranky old bat was just in a suspicious mood. The whole casino is designed to separate you from your money, and then some stranger pops up asking for a trade. She probably sniffed a scam.

Reminds me of black-market trading in the Caribbean. The airport and casino exchange rates are terrible, but if you sneak off to an OTB or locals market, you can get a good rate. That is, if you don't get robbed...

I'm saddened that they are charging more to exchange currency, especially given the heavy competition from the Detroit casinos and how it's more difficult to cross the border these days.

The one time I went to Windsor (while it was being converted to Caesars) the exchange rate was very fair. Of course, at the time, the US $ was considerably stronger than the CD. Still I would think that they would want it to be on par, or at least only a 1% vig given the competitive nature of the two cities.

I will say that I am not really the suspicious type, and I would probably have been amenable to buying what you were selling. Generally, however, my thought process goes, "I don't know this guy, he's talking to me about money, ignore him."

The only reason that wouldn't be the case in this event is because I would be the guy standing in line griping about the 4% the whole way. It's probably not the cashier's fault, in fact, I know it isn't, but she doesn't get toked a red cent...I don't care how much I win. The casino can darn well afford to pay her what a cashier in a reasonable situation would be toked.

Quote: teddys

That's nowhere near fair, but fine. I understand the casino is going to take a vig. The spread is 4% which is pretty reasonable.

It seems like all of modern life is about the vig. Exchanging money. Exchanging American Express checks. Taking money out of an ATM. Chaning flight time on your airline tickets. It just goes on and on and on.

In this particular case is it worth keeping the Canadian money and changing with your next friend who is going to Canada? Perhaps in a few months the Canadian money may even appreciate a buck or two.

You could have let her keep her money until any slot accepted your bills, get a slot ticket, then exchange the $200CA slot ticket that she watched you take out for her $200 USD. I get the feeling that the casino would frown on this behavior, but is it against the rules?

You asked a stranger to exchange money with you and you are incredulous. Really?

Does anybody under age 40 have change for a Hern ??

I would have been very skeptical too. Likewise I am very hesitant to buy lammers off of people at poker tournaments since I often don't know what the lammers look like and they could easily be fake.

I'd have been skeptical as well. I've sold cheques in a line at the cage at the poker room, but to a buyer who approched me. I would not buy any kind of coupon from someone in line.

A few years ago I was in Niagara Falls, CA and there was no fee if you had a players card. With all the money, they exchange, there shouldn't be any fee in the first place. It's just a complete rip off.

Quote: Mission146

The only reason that wouldn't be the case in this event is because I would be the guy standing in line griping about the 4% the whole way. It's probably not the cashier's fault, in fact, I know it isn't, but she doesn't get toked a red cent...I don't care how much I win. The casino can darn well afford to pay her what a cashier in a reasonable situation would be toked.

I've never gambled outside of the USA but mostly because of time considerations. I do hesitate to gamble in euros or patacas because it seems to me like that's an automatic 4% loss (2 percent each way) before I ever place a bet. Am I mistaken? Do casinos in Europe/Macau have narrow spreads? Or do travelers just take the hit for the experience of gambling abroad?

Also, I don't understand why a Canadian casino wouldn't accept a bet of US$ at parity. They profit off of the margin and it lowers a barrier to gambling for American customers. Apparently in Macao where $1.03 MOP$ = $1 HK$, a HK$ is almost universally accepted at parity in place of a MOP.
The only legitimate reason I could think of is that the cage is trying to deter tourists from changing their money and then leaving the site. It sounds to me like the casinos are just trying to rip people off though.

Maybe she adjusted your offer for her opinion of probability of counterfeit currency, deemed the offer not favorable on a risk-adjusted basis, and then played dumb.

Quote: deedubbs

Maybe she adjusted your offer for her opinion of probability of counterfeit currency, deemed the offer not favorable on a risk-adjusted basis, and then played dumb.

Nah, just dumb and sensible, the two are not mutually exclusive.

MOST counterfeit exchange takes place outside the casino. they will say they noticed you in the casino and followed you outside to discuss a proposition...usually some sob story involving Immigration and the IRS. You get a suitcase of bargain chips the casino catches the counterfeit chips, start playing tapes back and you get a tap on the shoulder and the guy ain't in a seer sucker jacket, he is in full uniform and has all the equipment on his belt. they sieze all your fake chips and you pay for lawyers.

the woman has probably been doing this several times a week for eons and is not going to be receptive to Math whiz what wants to throw a monkey wrench into her routine. she thinks that since it is "different" it is probably wrong and you know what a con man always says "You can't cheat an honest man".

Oh, so this is back.

I have $132 CDN that I want to sell. Any takers? Last time I checked the spot market was down to about 0.767 per USD. That's the lowest it's been in quite a long time.

I just got back from nine days in Quebec/Montreal. I would recommend a trip there. The casino is really very nice (and weird, but in a good way).

Quote: teddys

Oh, so this is back.

I have $132 CDN that I want to sell. Any takers? Last time I checked the spot market was down to about 0.767 per USD. That's the lowest it's been in quite a long time.

I just got back from nine days in Quebec/Montreal. I would recommend a trip there. The casino is really very nice (and weird, but in a good way).

I remember many years ago it was .66. I can remember going to Dennys for breakfast and it was $30 cdn. OK no big deal, I went back in 2012 and it was still $30 cdn but now it was actually 30 usd as well since the rate was so close. Glad to see it going back the other direction finally.