GOMES GAMING | News |
Morning Call - July 10, 2010
HIGH ROLLERS EXPECT, AND GET, EASY CREDIT FROM CASINOS
Parlors preparing for the well-off gamblers drawn to table games.
By Matt Assad, OF THE MORNING CALL
10:31 p.m. EDT, July 10, 2010
Ever try walking into your local bank and asking for a $100,000 line of credit in two hours? You probably wouldn't get it. But you might have better luck with a Pennsylvania casino.
With the arrival this week of table games such as blackjack, craps and baccarat, casinos are preparing to issue almost-instant credit to the kind of wealthy, perhaps millionaire, card players they hope will be visiting gambling halls across the state.
And when it comes to some of these players, the sky's the limit.
"If you have tables, then you better be ready to issue quick credit or no one with a thick wallet is going to want to come to your casino," said Dennis Gomes, a casino consultant whose 40-year career in gambling includes operating casinos in Atlantic City and Las Vegas. "Big players don't like walking around with a million dollars on their person."
That may be an example of the extreme, but the need to keep high rollers from carrying a bankroll in their pockets is why credit is offered by nearly every casino that has table games. The idea is, the richer the player, the higher the limit. So, when the Pennsylvania Gaming Control Board passed temporary regulations for credit last month,they put no cap on how much loan money each casino can offer an eligible player.
All of the state's casinos have ATM machines and cash personal checks. But most ATM accounts have a $300 to $1,000 daily maximum, and state law prevents casinos from cashing checks larger than $2,500.
Casino operators are hoping at least some table players will need more than that — perhaps a lot more.
With a credit line in place, the player signs a "marker" or what Pennsylvania's regulators call a "counter check," for the amount of chips they want. That marker, for say $10,000 worth of chips, is in effect writing a check to the casino. The player can keep writing new markers until the pre-approved limit is reached. At the end of the gambling session, if the player has chips left, he can turn them in and his markers on file will be reduced by the amount of the chips.
Casino lore is filled with stories of wealthy players — called "whales" — strolling into casinos and getting massive credit lines, before losing millions of dollars at the tables. In 1990, Akio Kashiwagi, a Japanese property developer known as "the warrior of baccarat" for fearlessly betting up to $200,000 a hand, played one legendary session at Trump Plaza in Atlantic City for six days and walked away $10 million lighter in the wallet. Two years later, Kashiwagi was found in his home near Mount Fuji, stabbed to death with a samurai sword. His estate had to pay off $9 million in gambling debts to multiple casinos.
Gomes said he was president of a Las Vegas casino when a high roller, whom he wouldn't identify, played $100,000 a hand for two days. Cashing marker after marker against his massive line of credit, the man lost $9 million, Gomes said. When it came time to pay up, the man bargained with Gomes to settle the debt at $7 million. The more than 20 percent discount — when the usual policy was to offer 10 percent — actually got Gomes in trouble with the casino chairman.
"I told [our chairman], 'All we did was give this guy the privilege of dragging little pieces of cardboard across our felt, and for that we made $7 million,'" Gomes said. "This cost us nothing."
And that's the idea behind casino credit. The player is merely given a chance to lose a lot of money. It's possible they'll use the credit to win a lot, but the odds are against that.
The way it works, the player requests a credit line by filling out an application that gives the casino access to their bank accounts and credit information. The casino's credit department reviews the financials and cross-checks the player's name with Central Credit, an international database — run by Las Vegas-based Global Cash Access Inc. — of every player who has a running line of credit at any casino in the country. Because of the database, if a player stiffs a casino, the next casino will know and likely deny credit, said Scott Dowty, an executive vice president at Global Cash Access.
Unlike a bank loan that can take weeks to get, the casino credit process can be done in a few hours on a business day, even with big money at stake. Players also can file the application online and have an approval to sign markers waiting when they arrive.
Under Pennsylvania regulations, a player with markers of less than $5,000 has 15 days before the casino will cash that check. If the marker is more than $5,000, the casino will wait 30 days to cash the check, but has the option of extending that to 45 days for extenuating circumstances. No interest is charged.
If a marker bounces, the casino is left to collect the debt, usually by seeking a civil judgment against the player. Under state law, the casino must collect the debt itself and cannot hire a collection company. It's usually not necessary, because most players pay up or face being blackballed in the Central Credit database.
Kevin O'Toole, Pennsylvania Gaming Control Board executive director, predicted the state's fledgling gambling halls won't see players like Kashiwagi, at least not anytime soon.
"It's too early to tell how high the credit lines will go," O'Toole said. "But I would think until our casinos add hotel rooms and convention space, the [credit] lines would be relatively small."
Gomes suggested another reason Pennsylvania will have difficulty attracting the so-called "whale." It simply can't offer the kind of free gifts other casinos offer high rollers because Pennsylvania's 16-percent tax on table game revenues is nearly twice as much as the tax on casinos in Atlantic City and Las Vegas. So, while Pennsylvania casinos will likely limit comp offers to free hotel rooms, food and limousine rides to the casino, the world's biggest casinos are luring the highest rollers with carrots that include airfare, luxury cars and international trips.
Gomes added that high rollers could avoid Pennsylvania because they often like places with multiple casinos — such as Atlantic City or the Las Vegas strip — so they can quickly move elsewhere if their luck, or credit limit, runs out.
Robert DeSalvio, president of Sands Casino Resort in Bethlehem, said he isn't expecting many big credit lines before the casino's 300-room hotel is open next May.
"In this tax environment, I'm not expecting the kind of credit lines they're seeing in Las Vegas and Macau," said DeSalvio, a former Atlantic City casino credit executive whose parent company, Las Vegas Sands, has larger, tables-dominated casinos in Las Vegas, Macau and Singapore. "But I think we can start slow, and once we get the hotel open, build from there."
That's where Mount Airy Casino President George Toth thinks he may have an edge over the state's other eight casinos. With 188 hotel rooms, Mount Airy in the Poconos will have the state's only casino hotel rooms when tables open next month. Toth hopes to use those rooms to lure big players from major East Coast casinos.
"We have a very aggressive player development staff that will be bringing high worth players who now play in Atlantic City and Connecticut," Toth said. "I'm not going to discuss our credit limit policies, but I'm confident that our golf course, hotel suites and spa will give us an advantage."
Toth noted that Mount Airy will be targeting wealthy players who want credit, but not necessarily whales seeking million-dollar limits. Even the state's most knowledgeable experts aren't sure whether the state's casinos can expect many whale sightings.
"When the economy is doing well, Las Vegas and Atlantic City have had good luck attracting the very wealthy player, but can Pennsylvania do the same?" O'Toole asked. "We will see. We will see."
CASINOS READY TO GIVE CREDIT WHERE IT'S DUE
Wealthy table-games players will be able to get big credit lines in a matter of hours. Here's how it works:
- Player gives a casino access to bank account information
- The casino checks the player's history in Central Credit, an international database that records the credit limit of players at every casino.
- With credit limit in hand, the player draws on the line by signing markers, or counter checks, that serve almost as a personal check.
- The casino cashes the marker in 15 to 45 days.
- The richer the player, the higher the limit. The wealthiest players have multimillion-dollar credit lines at multiple casinos.
TABLE GAMES ARE COMING
Here is the schedule of when table games will arrive at nearby casinos.
MOUNT AIRY CASINO RESORT
Test day: Today
Public opening: July 13
SANDS CASINO RESORT
Test day: July 16
Public opening: July 18
Public opening dates are subject to state Gaming Control Board approval that test day went well.
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