Collectors Turn to Casino Chips, Seeking Fun, Profit and a Link to Gambling History Through These Fascinating and Colorful Pieces of Clay and Plastic That Don't Lose Their Value Even After They Leave the Gaming Table
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Many longtime collectors are less worried about the types and quantities of limited-edition chips constantly being issued than they are about speculators who seem to flood any collectible market that breaks into the mainstream. "Like anything that's growing, chip collecting tends to have its problems," says Herz. "People get in with more greed than knowledge. There are some problems with misrepresentation, people trying to exploit a nonexistent rarity to collectors. It is easy for people to get carried away in a market as hot as chips."
The problem of scarcity has been particularly acute with Cuban chips. Garrett says he has come across several unscrupulous dealers in recent years who have misrepresented certain Cuban chips. The scam goes like this: The dealer presents a chip to a collector as "the only one he's ever seen," and sells it for, say, $200 because of its supposed rarity. Several months later, the collector discovers the dealer has several more of the same chip. The value of the supposedly one-of-a-kind chip then plummets. "One of the problems with the hobby is we're so new and taking off so fast there is not much literature and few catalogs where you can find information about chips," says Black. "You have to depend on who you're dealing with."
As with other collectibles, education is the key to avoiding scams. With casino chips, part of that education is looking at a chip and knowing who made it and in approximately which year. Though a dozen or so companies have made chips over the last century, each with its own distinctive mold designs, only seven supply U.S. casinos today: Paul-Son Gaming Supplies, the Bud Jones Co. and R.T. Plastics, all three of which are based in Las Vegas; Chipco International, which is based in Windham, Maine; T.R. King, of Los Angeles; Atlantic Molding, of Portland, Maine; and Reliable, of Frazier Park, California. (There are several European companies that manufacture chips similar to those used in the United States, as well as lightweight jetons and rectangular plaques often seen in French casinos.)
The three largest manufacturers--Paul-Son, Bud Jones and Chipco--each use a different manufacturing process, and their chips are easily identifiable by collectors. Paul-Son and Bud Jones have made casino chips for five decades, while Chipco entered the market in 1985.
Paul-Son's chips are made through a compression-mold process and are identifiable by small, uneven colored stripes on the edge of a chip. The stripes have a "squished" look and appear to be painted on but are actually composed of small, colored inserts that are set into a mold. Under extremely high pressure, the inserts and surrounding plastic material are fused into one solid block. Many Paul-Son chips are also imprinted around the edge with the company's distinctive "hat and cane" mold. (The design was originally created decades ago by Christy & Jones Co., Bud Jones' first company, which was sold to Paul-Son when it dissolved in the 1960s.) Most of the casinos in Las Vegas use chips by Paul-Son, a third-generation company founded by Paul Endy Sr., which went public three years ago.
Bud Jones uses an injection-mold process. Instead of squeezing the chips, the process works by injecting plastic material around preformed lettering, denominations and patterns. This creates fine geometric patterns around the edge and rim of the chip. Bud Jones is also well known for its metal inlay chips, which have a metal "coin" embedded into the center.
Chipco's chips are made of an injection-molded ceramic material in one-piece construction. They usually have a non-slip sandpaper-like texture and are identified by full-color graphics that extend to the edge of the chip. Using a proprietary process, images are printed 5/1,000 of an inch deep into the chip's surface. Chipco chips are also known for stripes and designs on the rim, and the manufacturer is the only one to print denominations and lettering on the rims.
Paul-Son and Bud Jones credit Chipco with revolutionizing the chip business and fueling the collector market by introducing the first chips with full-color, photo-like graphics.
"Never in my wildest dreams did I think it would blossom into the industry it has or begin to command the dollar value that collectors were willing to pay," says Chipco president John Kendall.
"We didn't make chips like that; they forced us to do it," Paul-Son senior vice president of sales Lou DeGregorio says about Chipco. "But when we saw where it was going with the market we moved fast. We painted a bull's-eye on them."
So did Bud Jones, who is bemused by all the attention casino chips have received in recent years. "I wish I had one of every chip I ever made," says Jones, who got into the business 50 years ago hand-drilling dice for a long-defunct company. The company is the world's leader in casino dice, and all Bud Jones-manufactured dice are hand-drilled to this day. "If I had, it would have dawned on me 10 years ago to retire."
Though few have played a greater role in the manufacture of casino chips, Jones has never been a collector himself and has no intention of starting today. "It's kind of like the postman going for a walk on his day off," he says. Jones, who along with his wife, Jean, was one of the first two inductees into International Gaming & Wagering Business magazine's hall of fame, isn't complaining, though. Casinos buy his chips for 59 cents to 75 cents each, making the company anywhere from $2,950 to $3,750 for every commemorative chip ordered in an edition of 5,000.
It's not the chip makers that are profiting the most from chip collectors, however. It's the casinos. For every $5 chip that walks, the casino earns more than $4 in pure profit. The El San Juan casino in Puerto Rico is believed to be the first casino to have bought a chip that ended up walking in major quantities. In November 1988, the casino ordered 15,000 $1 chips from Chipco that portrayed a person bouncing a beach ball in front of palm trees and the ocean.
"Those chips would normally last five years," says Kendall. "Within 30 days the casino ordered another 15,000. Six months later they ordered another15,000." And a market was born.
Caesars in Atlantic City is acknowledged as the first casino to introduce a commemorative chip to the boardwalk. The casino needed a new set of chips because of a counterfeiting problem, and also turned to Chipco. "In 1991 we were in a recession and looking for any conceivable way to improve performance," says Edward Sutor, Caesars' senior vice president of finance. "Here was a way to solve our problem of needing new chips and increasing our revenue. It's exceeded all of our expectations."
Not only did Caesars receive what it thought was a more secure chip, it discovered a sure-fire way to make money. Typically 90 to 95 percent of its commemorative chips walk. Caesars recently introduced one of the market's highest-denomination commemorative chips--a $25 anniversary chip in an edition of 50,000. When Caesars removed the chip from play, after about a year, only 900 remained. Taking into account the manufacturer's price of about 65 cents a chip, Caesars cleared a profit of nearly $1.2 million. "Every time one of the casinos' chips walks and doesn't get redeemed, it is like the casino writing a check that isn't cashed," says Black.
The Hard Rock casino in Las Vegas has become a big proponent of commemorative chips that feature photographs of rock musicians, and issues approximately one per month. "Hard Rock said they wanted funky-looking chips, so we worked with [owner] Peter Morton's design group, in Los Angeles, to come up with a line of chips," says DeGregorio. "They paid for all their casino equipment on profit they made on chips that walked out of the casino."
Harrah's Atlantic City, along with Caesars, was instrumental in issuing a special Miss America pageant chip that was jointly circulated in September 1997 by New Jersey's casinos--the first time all 12 banded together to issue a common chip.
Harrah's vice president of marketing, Susan Schneider, is a member of the pageant's board of directors, and she persuaded it to allow a photograph of the previous year's Miss America to grace one side of the commemorative chip. The obverse carried the name of the issuing casino. "We don't do it for the collector, we do it for our customers," says Schneider. "On the operations side it adds fun and excitement to the casino floor. But we realize the collector plays a part in this as well."
Even longtime holdouts against commemorative chips have decided they can no longer ignore the market. In December 1997, Steve Wynn's Mirage and Treasure Island casinos, which had never issued commemorative chips, came out with chips made by Paul-Son commemorating illusionists Siegfried & Roy and circus performers Cirque Du Soleil, respectively.
DeGregorio, for one, disputes the opinion that casinos are issuing too many different commemorative chips in editions that are too great in number. "Maybe there's not enough collectors," he observes. "There are two sides to the coin. If there were 10,000 collectors, then there wouldn't be enough chips."
To remedy the situation, Paul-Son has entered into a joint venture called Brand One with DeBartolo Entertainment to produce oversized, nongaming and nondenominational commemorative chips featuring sports figures from the National Football League, National Basketball Association and NASCAR auto racing. The first such chip, or trading disk as Paul-Son calls it, was produced in an extremely limited quantity in 1994 and given away to San Francisco Forty Niners' stadium superbox holders. (DeBartolo owns the Forty Niners.) The latest trading disk was manufactured for the May 1997 Rock and Roll Hall of Fame induction ceremonies. In the future, Paul-Son envisions the disks, which are made from the same material as its casino chips, being used as high-tech tickets to major sporting events, such as the Super Bowl. The disks, which would be imprinted with a variety of security features, would be kept by ticket holders as a memento. "We plan to go to the market and create the next collectible, and that market will be 50 times bigger than casino chips," says DeGregorio.
Whether that will be good for the traditional chip collector remains to be seen. What's assured is that many more people will be clamoring for a little piece of Havana, Vegas and Atlantic City in the coming years.
Barry Rosenberg is a New York-based journalist, specializing in business and technology. Cashing In
Many outlets serve the burgeoning army of chip collectors. To this day, most chip collectors do business by mail. While several retail stores are dedicated to chips and other gambling collectibles, primarily in Atlantic City and Las Vegas, dozens of individuals advertise their chips for sale in the back of the Casino Chip and Gaming Token Collectors Club's quarterly newsletter, in Gaming Times magazine or on the Internet.
Casino Chip and Gaming Tokens Collectors Club James Steffner, membership officer, P.O. Box 368, Wellington, Ohio 44090. One-year dues are $20. Membership includes quarterly publication, "Casino Chip and Token News."
Gaming Times magazine Bill Akeman Jr., publisher, (702) 876-6020. Akeman also operates what is probably the nation's largest retail store devoted to chips and other casino collectibles. Contact the magazine at: 4089 Spring Mountain Road., Las Vegas, Nevada 89102; (702) 876-6020.
Casino Collectible Magazine Tom and Gayle Pleau, publishers, P.O. Box 7438, Liguna Niguel, California 92607; (714) 362-9101, six issues for $13.
Gambler's General Store 800 South Main Street, Las Vegas, Nevada 89101; (800) 322-2447 or (702) 382-9903.
The Gaming Emporium Bob Mera, 3011 Boardwalk, Atlantic City, New Jersey; (800) 354-3075 or (609) 347-9190.
Gambler's Paradice Ocean One Mall, Atlantic City, New Jersey; (800) 344- 2594 or (609) 344-2500.