Are Casino Chips Legal Tender?


The use of casino chips is a highly debatable topic that goes back for centuries. Besides the real advantages that it has when playing, many people ask about casino chips if these coin-like plastics are legal tender. Since players are willing to take it as your wager when playing, can someone actually use it to settle a debt?

Before 1980, casino chips were de facto legal tender throughout Nevada. It means that when you have a casino chip, any casino in Nevada should accept it. However, in 1980, the Nevada State Gaming Control Board passed a regulation prohibiting the use of tokens or chips outside the issuing casino.

You can’t use casino chips to pay for services or buy goods, but like most gambling laws, the legality of using casino chips as a form of currency is complicated. Let’s discuss this topic in great detail and, hopefully, prevent you from breaking the law from a simple act of tipping the waiter with casino chips. 

casino chips aren't a legal tender, but more a scrip.
Many people still mistakenly think that casino chips can be used as a form of payment.

Casino Chips a Legal Tender

Legal tender is a law that makes a coin or banknote usable as a form of payment for a debt. However, it needs to come from the government with a declaration that people can use such a token instead of real money to pay for any debt—be it public or private.

There are two types of payments that you can use to pay your debt: legal tender or scrip. Both are acceptable ways for someone to pay for goods and services. However, a legal tender is more reliable because the government must accept it as a form of payment. Scrip is more like a bond—it only has its value if someone is willing to accept it as a form of payment.

In the past, if you have a chip that came from a casino within Nevada, you can use it to pay for goods and services. Since the issuing casino guarantees that it has value, establishments in the state will accept it as a form of payment. However, it’s no longer the case after the Nevada State Control Board imposed this law about the use of chips and tokens:

According to point 3 of paragraph 12.060, “a licensee shall not accept chips or tokens as payment for any goods or services offered at the licensee’s gaming establishment with the exception of the specific use for which the chips or tokens were issued, and shall not give chips or tokens as change in any other transaction.”

In simple terms, you can only use a casino chip at the gaming table. It serves no other purpose and doesn’t have any value, even if you’re inside the issuing establishment, as long as you’re outside the facility where you should use it. So if you’re not playing poker, baccarat, blackjack, roulette, or other games that require casino chips, it doesn’t have any real value.

That’s a clear interpretation regarding the use of chips and tokens within the issuing establishment, but is it the same for P2P transactions? Can you use casino chips as a tip for a waiter, pay for a service or commodity, or even sell it on eBay? 

Using casino chips for P2P transactions is quite common.
According to the law you can only use casino chips at the gaming table. Nonetheless, casino chips are still used for P2P transactions and casinos don’t care too much about it.

Using Casino Chips Outside the Issuing Casino

There’s one complicated point in the Nevada State Control Board’s regulation on the use of chips and tokens. According to point 1 of paragraph 12.060, “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.”

What it means is that tokens or chips are only a representation of the actual money that you used to buy the chips. The sole owner of the chips you’re holding is the casino that issued it. It doesn’t belong to you; therefore, you can’t give it to anyone. You can’t use it for anything other than the purpose that it serves, which is a currency for the gaming tables.

If you’re going to use it to tip a cab driver, a waitress, a bellman, or anyone who provided you with any service outside the casino, you’re breaking federal law. That’s because it’s not your property, and isn’t yours to give away like a real currency. You’re not even allowed to use it as a form of payment for anything that you’re purchasing.

However, there’s a difference between purchasing casino chips to pay for goods and services and buying it for hobbies, collections, or other related purposes.

If you’re buying chips with the intent of collecting it, you’re not breaking any law.

When it comes to selling casino chips on eBay or other similar marketplaces, no law explicitly prohibits it. Again, as long as someone is willing to accept it in exchange for the money you’re asking, you’re not breaking any law. 

Even with an easily understandable law about the use of tokens and chips, people still accept it as a form of payment throughout the state. In fact, if you walk around Nevada with a $500 chip, it’ll still be as good as $500 in cash. It’s one reason why many people are still unaware that casino chips aren’t legal tender. 

Why Do People Accept Chips and Casinos Do Nothing?

Casinos are openly stating that their chips have no real value outside their premises. Big casinos even have signs that prohibit people from using their chips as a form of currency, but in reality, it’s only for formality.

Poker chips have no real value outside of the casino.
In practice casinos don’t care at all if people use chips as a form of currency. Just be aware of that by the law you are not allowed to.

The use of casino chips as a form of currency outside their premises has minimal effect on their business. Unlike cheating, theft, robbery, underage gambling, drug dealing, money laundering, prostitution, and counterfeit-currency passing, the use of casino chips outside their premises doesn’t negatively impact their business. That’s why casinos are exerting minimal effort to counter the use of casino chips as a form of currency outside their premises.

As long as you have a casino chip that legitimately came from them, the casino owes you money. Most of them wouldn’t even ask you where it came from or how you get it; they’ll just trade it with cash. So, despite the prohibitions in federal law, people still take it as a form of payment.

Again, it goes back to the casinos having any concern about the use of their chips. Since people are allowed to take it home as a souvenir or part of their collection, they couldn’t care less about people who bring their casino chips outside the premises. 

Another reason is that a $100 chip costs much less to produce, and if a person takes it home, which happens a lot, they’ll keep the difference. Many casino chips are microchipped and even the most advanced casino chips with RFID tags installed only cost $2.50 more than an average casino chip. It’s like a business of selling chips for mad profits, and no casino would ever start a crackdown on such a profitable business.

We have yet to hear about a state, prosecuting anyone for using or accepting chips as a form of payment. Casino chips aren’t legal tender, but rather a scrip that only has value when another person is willing to accept it. And in Nevada, a casino chip remains as good as cash!

Conclusion

There are prohibitions and regulations regarding the use of casino chips outside the premises of the issuing casino. It’s a complicated law that is open for various interpretations. However, we’re sure of one thing: casino chips aren’t legal tender.

Casino chips are a scrip, a bond that only has value when a person is willing to take it as a form of payment. If you’re holding a chip, you know that a casino owes you money, and it’s a widespread practice for many people to use or accept chips as a form of payment.

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Primoz

I have played poker professionally for more than 10 years. I was a winner at every poker format that I played - from tournaments to cash games, both in NL Holdem and PLO. Now my biggest satisfaction is to provide enthusiastic but new poker players with answers to all of their questions.

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