I believe prohibiting further redemption of Playboy gaming chips and slot tokens is necessary to protect and ensure the ongoing integrity of casino gaming.
Regulators in New Jersey said people could no longer redeem chips from the long-defunct Playboy Hotel and Casino in Atlantic City, ordered further redemptions to cease, and whatever funds were left to be awarded to the state.
The Casino Control Commission’s moves effectively ended the long-running saga involving Playboy gaming chips, which were still being used to represent gambling debt years after Playboy Casino rebranded in 1984.
Shortly before the three-member Commission voted, Chair James Plousis said the New Jersey Division of Gaming Enforcement (NJDGE) had “made a compelling argument” to end redemption of the chips permanently.
“The circumstances surrounding the Playboy chips and the tokens have so substantially changed that I believe prohibiting further redemption of Playboy gaming chips and slot tokens is necessary to protect and ensure the ongoing integrity of casino gaming,” Plousis said, according to a transcript of the Commission’s meeting on September 13.
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Chips Were Ordered to Be Destroyed But Weren’t
The company contracted to destroy those chips failed to do so. They were instead buried in a roadside and, at some point after that, dug up and able to be accessed by certain members of the public.
According to Plousis, the Commission granted the owners and operators of Playboy Casino a conditional one-year New Jersey casino license in April 1981. But at a license review hearing in April 1982, the Commission denied a license application from Playboy CEO Hugh Hefner.
The Commission then gave Playboy’s joint venture (JV) partner, a precursor to Elsinore Shore Associates, a casino license — on the condition that the JV divest itself from Playboy.
“Playboy ultimately sold its interests in the Playboy Casino to its partner in 1984,” Plousis said. “The casino hotel was renamed the Atlantis Hotel and Casino. The Commission did, however, require Atlantis to continue to redeem on-site any outstanding Playboy gaming chips and slot machine tokens.”
Atlantis was denied renewal of its casino license in 1989. The Commission ordered the facility closed.
“Between 1984 and 1989, the people who had been given Playboy chips as a representation of gambling debt were able to redeem those at the Atlantis in person at the very same building that they obtained them,” Charles Kimmel, deputy attorney general for the NJDGE, told the Commission before the vote.
“There wasn’t much difficulty in being able for people to cash those in.”
Kimmel said that when Atlantis closed in 1989, the Commission ordered that money be set aside for both Atlantis and Playboy redemptions. About $450,000 was designated for Playboy redemptions. That amount “represented the chips that were outstanding to gamblers at that time,” he said. “It did not represent the inventory of the company.”
Chips that were in Atlantis’ inventory were ordered to be destroyed, ensuring that the only outstanding chips were held by people who had received them as a representation of gambling debt.
But that’s not what happened.
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“The company contracted to destroy those chips failed to do so,” Kimmel said. “They were instead buried in a roadside and, at some point after that, dug up and able to be accessed by certain members of the public.”
Kimmel said the fund set up in 1989 was meant only for those individuals who had obtained the chips from Playboy.
“It was not meant as something for a hedge on speculation or for people to be able to redeem on a secondary market. They are not supposed to be cash equivalents. Recently, we have found that at least one person has obtained chips on the secondary market and has attempted to redeem those.”
Although the Unclaimed Property Administrator denied the request for redemption, Kimmel said the incident caused the NJDGE to spring into action. It filed an emergency order on July 7, looking to end the issue once and for all.
With the vote, the Commission ordered Elsinore to release funds held in certain dedicated accounts, among other things, according to orders before the Commission when they took their vote. The orders also designated the State of New Jersey Cash Management Fund as the depository for any amount left over for Playboy redemptions.
Playboy Case Taught Regulators a Lesson
Essentially, we learned our lesson from the Playboy case.
Casinos have come and gone since 1984, when the Playboy Casino ceased to exist. But Kimmel said New Jersey regulators bungled its handling of the chips issue.
“Essentially, we learned our lesson from the Playboy case,” Kimmel said. “When other casinos closed, we established [that] they had to establish a fund and allow people to come in and redeem them in person for a certain amount of time — generally, six months to a year.
“When places like the Showboat closed or the Taj Mahal, you had a limited amount of time in order to redeem those chips, which didn’t go on forever the way the Playboy one was.”
Kimmel added that Atlantis “is open-ended, but at this time, we’re only aware of the Playboy chips being redeemed improperly.”
