Line Of Credit — The Good, The Bad & The Ugly

To Receive a Line of Credit or Not to Receive, That is the Question!

Some of my more frequent gambling friends ask me about lines of credit (LOC) and what, if any, benefit there is to having one available.

First of all, let’s make sure we know what a LOC is in the first place. A casino line of credit is essentially a credit card good only at the casino in which you have said LOC. It makes available a certain amount of money by which you sign for it, it’s given to you in cash, and you’re supposed to use it to gamble with at the casino. Most players who have a LOC sit down at their favorite table game and request a certain dollar amount in credit from the pit boss (the guy that’s in charge of the section of table games at which you’re sitting). They will print out a check/voucher made out to you, you endorse it, and they give you chips equal to whatever you just took out in credit. In return, they drop the check/voucher into the money box just as if you had bought in for whatever amount of money they just gave you in chips.

Let’s give a real life example: I have a fair number of lines of credit at different casinos around the country. If I’m at a casino in which I have a line of credit, I simply enter the casino, sit down at my table game of choice and request $500.00 off my line of credit. The pit boss will look me up in their computer system, see my credit line has been authorized for $5000 and assuming I have $500.00 available on my credit line, he comes back with a voucher looking check for my signature. I simply endorse the check, the dealer counts out $500 in chips and slides them my way, ready to roll! After that, the deal folds my voucher in half and drops it down into the money box just as if I had dropped five Benjamins on the table originally.

What if I go on a tear and (proverbially) light the table on fire? If that’s the case, when I take my stacks and stacks of chips up to the cashier cage, I would simply inform the nice cage clerk that I would like to pay off my marker. She would look me up in their computer system, see that I had a debt of $500 owed to them, and she would process the paperwork to reflect that I had paid what I owed the casino. The rest of my winnings were for me to do as I please.

What if I don’t play table games, I’m a slot jockey? That’s okay too! You can either start at the cashier cage and request money off your line of credit or go to your favorite slot/video poker machine and request an attendant assist you (this second option may not be available at all casinos). Either way, you again sign a voucher, but instead of getting chips to play with, you get cash for the machines. Again, assuming I take out $500 I am then free to start running from machine to machine pumping my borrowed money into those idiot boxes as fast as my little heart can process it! If I hit a jackpot (or royal if on a video poker machine) then once I cash out my winnings, I simply need to approach the friendly cashier and explain I’d like to pay off my tab!

So why do I like LOC at a casino? There are a few reasons: First, I like that I don’t have to carry large sums of cash with me when I travel to Vegas. I don’t feel comfortable having that kind of money on me when I’m walking the Strip or the casino floor. Because of that, I may be forced to use an ATM. But with sky-high ATM service fees (usually $5 assessed by the ATM plus $3 by my bank), it costs me $8 just to gain access to my own money. I know, I know, that’s the cost of convenience. The other reason I like having access to a LOC: I never know when I’m going to be at a casino! If the night takes me to a casino, I may not have thought ahead and hit up an ATM or obtain traveler’s checks. There have been times when I was on a road trip and if I didn’t have access to my bank (this problem may now have been resolved thanks to GPS and smartphone apps), I would be without cash. Not so if I have a LOC at said casino. Here’s one other benefit to having a LOC that the casinos are crazy about: it’s an interest free loan (in many cases). You take out the money, but you don’t gamble it. You spend it on dinner, shopping, bills…any by the time the LOC statement comes in the mail, you pay it off sans any interest! Now I’ll admit this is NOT the purpose of the LOC and the casino has the right to terminate your LOC if you’re misusing it, but if you’re paying off their bill at the end of the month, they may look a blind eye to the behavior if you’re a good customer (i.e. losing frequently).

So what’s the drawback to having a LOC? In one word: Responsibility. Are you responsible enough to A) not lose beyond what you can afford [despite a LOC larger than your average monthly checking account balance] and B) to pay off what you owe within the usual 30 day allotment to make payment? Some casinos might allow 60 or even 90 days depending on how much you lost and how long you’ve been a LOC holding client. But is that even something you would want to incur? Making payments for the next three months to pay off casino loses? I mean, at least when Christmas credit card statements come in January you have something to show for the debt!

In this day and age, long gone are days when goons would show up at your door with crowbar in hand and “make an example” of deadbeats. Instead, they’ve gone high-tech and they use garnishments instead of crowbars, lawsuits instead of goons, and let’s be honest, you can explain a broken face to your boss as a car accident…a garnishment being served to your employer by a casino suit is a much more embarrassing situation.

But, that all being said, I think that LOC are a wonderful thing and if used responsibly, as you should with credit cards, they can be a convenient way to maneuver though a casino.

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About tony

Tony is a solo practice attorney in Mid-Michigan with an emphasis on Estate Planning, Criminal Defense and Business Law. He also enjoys Davidoff cigars, Las Vegas and Bacardi rum.