Why Do Casinos Use Chips And Not Money?

man holding casino chipsThe casino chip is an iconic element of the whole real world gambling experience. People love holding them in their hands and many experienced gamblers have even learned to do impressive tricks with them.

Chips represent money inside a casino, and we use them to place bets on the various table games that are available.

They come in different colours so that no two players at a table can get their chips mixed up, and they can also represent different numerical cash amounts.

This explains their function, but they have also been designed to feel satisfying in the hand and to look pleasing to the eye, which is why they have become so much more than simply gambling tokens. For many, they are an integral part of what going to a casino is all about.

Back in the 1950s, chips were made of clay, but they have mostly been replaced now by a composite material that is more durable, but ceramic chips are another popular choice for a more upmarket feel, and metal chips exist as well.

Anyone who knows their onions will already have spotted our misuse of the word ‘chip’, which is covered in the first section of the article below, but since most people use this term regardless of what they mean, we will continue to do so throughout this article.

Sorry if that annoys the purists!

Chip vs Check

casino chips and checks

Here’s an interesting piece of information for you.

The term ‘chips’ is almost always used incorrectly. Technically, there are two types of casino token or currency, the chip and the check, and in the words of Peter Sellers, impersonating Michael Caine; “Not a lot of people know that”.

Although the terms are often used interchangeably these days, in actual fact there is a difference.

  • Chip – Has no specific value. Can be used to represent £1 or £100 depending on the gambler. Chips cannot be cashed in, but are used for playing at a specific roulette table, for example. So if you were playing yellow chips at £5 apiece, the dealer would know that, and when you finish playing they would cash you out with checks to the value of your chips. The person taking your seat might want to play £10 a chip, so then the yellow chips take on this new value.
  • Check – These do have a set value, and are used as real currency within the casino. A £5 check will be a £5 check forever, and will often even have the amount printed on it. You can bet with these directly in games like blackjack, whereas at others you would have to swap them for chips to play the game. Checks may also be referred to as cheques.

So when you go to the cashier and hand over your money, you will receive checks to the value of your payment. You can then spend those checks however you want. You can spend £50 of checks at a roulette table buying £50 worth of chips, win £20, then cash in your chips for £70 worth of checks and mosey on over to play 3 Card Poker betting with £5 checks per game.

Essentially then, checks are casino money and you can use them to buy chips where the game won’t let you bet with checks directly.

Checks can actually be chipped (which is confusing isn’t it) so that the casino can track where each one is at all times, and monitor each person’s playing behaviour. We’ll cover this sort of thing in more detail later though.

Why Do Casinos Use Chips Instead of Money?

It might all seem like an overly complicated load of messing about, but there are several very good reasons for the existence of casino chips.

In fact, casino chips solve so many potential issues that the casino simply wouldn’t be the casino without them, even though they give the casino yet another way to get the better of you as you will find out shortly.

Psychology

holding casino chipsNo one likes losing, but losing a small round plastic disc hurts a lot less than losing a crisp new £10 note – even if that disc is technically worth £10.

When you think about it, when you buy your chips at a casino you are paying them the money you are prepared to lose up front, then slowly crystalising that loss as the night goes on and your bankroll goes down.

This means you have already psychologically parted with that money.

They don’t care how you spend your chips, they already have your cash, they just hope you don’t come back to the cashier unless it’s to buy more.

Obviously, you can win as well, but more people lose than win.

What’s more, if you bought 20 chips for £200 and you only have 2 of them left at the end of the night, you are much more likely to gamble them away in an all or nothing final hurrah than you would be likely to spend your last £20 note.

It’s fun money right? So you might as well spend the last of it rather than cashing it in.

Mentally, chips don’t have the same value as physical cash, so players are more likely to be frivolous with them, which means the casino keeps more of your money.

Novelty Value

novelty casino chipA tourist visiting a casino will get a real kick out of using proper casino chips for the first time, and if they are not regular casino players, they may well want a memento of their trip.

And what better memento than a casino chip from the place they had their experience in?

This is especially true of the big famous casinos which have their names and logos printed onto their chips - they make excellent keepsakes.

What does that mean for the casino?

Well they might lose a chip, but since it was never cashed in they get to keep the value of that chip. A casino chip might cost them 50p to buy in, but the lowest chip denomination at bigger casinos is likely to be about £5, so they have done well out of the trade.

This also ties into the psychology.

A chip can be designed to look appealing and feel great, which might seem insignificant, but coupled with all of the other stimulants in a casino like flashing lights and pinging machines, it all adds up to create an atmosphere where you stay longer and spend more.

Security

RFIDThis is the big one.

Unlike money, which can be spent anywhere, a casino chip only holds value in the casino it is from, so if it is taken outside of the casino it is worthless.

This means that anyone stupid enough to try and rob a casino or quietly pick pocket money from a table’s coffers wouldn’t get away with any real money, since there isn’t much of the stuff on the casino floor.

It’s true that dealers might accept pound notes at the table in exchange for chips, but it will be small fry stuff compared to the amount that is paid in at the cashier and locked away in a vault. Even with electronic purchases of chips, the security risk is lessened by using chips as casino currency.

It also cuts down the likelihood of staff members stealing from their employers. It would be difficult to track how much money was taken at a table using cash, and an unscrupulous dealer could start pocketing losing bets and as far as the casino would know, those bets would never have been placed.

Basically, the less actual cash their is floating around on the casino floor the better and safer it is for everyone, because it massively reduces the opportunity for crime both petty and organised.

Chips can also be fitted (or chipped!) with RFID tags, which stands for radio frequency ID, so the casino can track each and every one of them.

This has obvious security benefits and makes them impossible to counterfeit, but also means that they can track their customers and gather information on their playing habits, average bet sizes, and things like that. All useful information.

This isn’t massively common as it is pricey and the benefits don’t justify the cost to such an extent that it’s worth the effort, but it does happen in some places, and is more likely with bigger denomination chips. A £10 chip that goes missing isn’t really an issue, but a £50k chip that goes missing is a bigger problem, and if it is chipped it can be cancelled so whoever has it can’t cash it in.

Functionality

roulette table betsOne aspect that is easy to overlook is the functionality of casino chips.

The more you think about it, the more ridiculous it would be to try and run certain games using real money to bet with.

Take roulette for example; how on earth you would make those inside bets like splits and corners accurately with bank notes? It just wouldn’t be possible.

On top of this, coloured chips are instantly identifiable whereas bank notes do not scan quite so easily with a quick glance. The value of a casino chip is impossible to misread.

From a practical point of view, it’s much easier to bet with chips than money because:

  • A: Chips won’t blow away or be as easily moved by accident as a bank note and
  • B: It’s much less likely for someone to get confused between their chips and another player’s than it is for two players to argue about whose fiver that is in the middle of the table.
  • C: Chips can be easily stacked and fit neatly into the betting area, bank notes and lose change do not.
  • D: Dealers can much more effectively count out winnings etc using chips because of their uniform size, shape, and markings.

This all means that the use of chips keeps the flow of betting moving nicely and avoids unnecessary confusion and even potential conflicts.

Not to mention the fact that they are easier for the player to handle than cash. The size and weight of the chips makes them much easier to work with than scraggly tenners and fistfuls of pound coins.

Imagine trying to make a £5k bet in cash, for example. Much easier with five £1k chips.

Branding and Marketing

Borgata Casino ChipsThis is a by-product of using chis instead of cash rather than one of the reasons behind it, but casinos have taken to branding their chips with their logos.

This is just another way of marketing, increasing brand strength, and creating brand loyalty in players.

As soon as you mention certain industries, specific brands come to mind.

If we say ‘Fast Food’ then we would put money on the first brand coming into your mind being McDonalds, and 9 times out of 10 we would be right.

Casinos want their brand to be the McDonalds of the gambling world, so they will stick their name and logo in front of you every opportunity they get.

What’s more, if you have spent the entire night using chips with that brand on, those chips feel as though they are ‘yours’ and therefore part of that brand is ‘yours’ too.

So, unless you had some sort of terrible experience with a staff member or something, next time you are in town which casino will you visit? The one that pops into your head first of course, and that will be the casino you associate with the most.

Once a player loves a casino brand they will recommend it to their friends, suggest going there with a group, or even buy merchandise including, you guessed it, novelty branded casino chips.

Player Protection

take casino chipsYes, believe it or not the use of chips is also a tool for protecting vulnerable players.

You see, when you buy chips at a casino, you are actually just loaning them for the duration of your time there – they still belong to the casino.

So if there was an at risk player who was identified, maybe someone who was drunk or who had previously self excluded but had somehow got back in but was recognised, the casino could do something about it.

They could step in at take their chips back so that the player could no longer use them to gamble with.

However, if that player was gambling with money, the casino would have no right to take the money away, because it is not theirs.

They could obviously kick the player out but removing their chips is a much more civilised and effective way of doing things.

Chips also provides an extra hurdle for anyone who is at risk to jump before being able to gamble - if security don’t spot them on the door then the cashier might recognise them and not hand over any chips in the first place.

Why do People Love Casino Chips?

casino player in sunglasses

There’s something about them isn’t there?

The moment a newbie casino player is handed their first stack of chips they will feel like an absolute casino don, despite having no idea what they are doing.

They are just the right size, weight, and texture to make holding them enjoyable; expertly designed and visually striking too.

They slide easily across the felt on the blackjack table, stack beautifully when placing roulette bets, and make a satisfying sound when tossed into the pot in the middle of the poker table.

Psychologically they make us feel like we are doing well, and anyone with a large stash of chips knows that the rest of the casino is looking at them in envy, so they are a status symbol too.

They are also individual to their owner up to a point, for the time they have them at least. Sure you will come across other people with the same colour chips as you, but not at the same table, so these chips are special, these chips are yours.

Hollywood probably has a part to play here too, having filled so many casino scenes with sharp as a tac characters gambling huge sums of money without even breaking a sweat, and doing chip tricks as they play.

This might not be very realistic but it certainly feels cool to watch, and casino chips fit into that world of glamour and riches perfectly.