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Originally Posted by smoothcriminal99
What are you talking about no one had lines of credit that I know of at 88 but even if they did I doubt 88 was owed over 1 million from these action players you are referring to and not able to recoup it. Seeing as the games are all the same players at legends as 88 I doubt that what you are saying is true. What caused them to go under is just bad business like full tilt UB and a lot of businesses in the poker industry that were unregulated/poorly regulated. You get large amount of player funds (people take chips home especially for big games or have boxes with large amounts of chips in them). Instead of making a reserve to cover them they use that money/take it out of the company. When people mass withdrawal because of competition or being shut down or whatever they don't have reserves to cover their liabilities.
If casinos do a expiration period of outstanding chips and have previous owners cover them/swap them out to ensure SOMEONE ELSES BALANCE SHEET is correct and implement their own chips which they can ensure there probably is a good reason but I haven't heard they're doing that and there probably is a good reason why the previous owner wouldn't agree to that and is getting out... It's a lot larger than you'd expect and probably not reported 100% accurately as it is difficult to actually track.
I don't know the details of the deal and I don't really know the true number of these things only the past owner can realistically as much as you audit/have good lawyers etc so hopefully this works out well but to say their lawyers were better than Johnny Chan's is pretty laughable. There are many reasons why buying an existing business in an unregulated industry is opening the door for you to inherit issues though even if it is a good and honorably run business.
If an owner or a friend of an owner borrowed chips from the house that would technically be an extension of a line of credit. Which would be impossible to track since it wouldn’t have to be an official transaction. It could have been viewed publicly as a staking deal. Did Chan stake players? Of course staking from business money would be horribly corrupt, but it’s not as if anyone would have known.
Or maybe you’re correct and an employee/owner outright stole chips and sold them to players outside of the premises of the room.
You make an interesting point about outstanding chips. One of the issues with checking the balance sheets is that rooms can have chips in circulation. Some are in safety deposit boxes and rooms typically have a master key so they can run accounting if necessary. But some players do take large denomination chips home. Which can be an issue and the rooms try to discourage this behavior but of course they can’t control it perfectly. It is always possible to compare cash-on-hand and chips-on-hand. You have to hope they add up to a constant amount over time. any difference could be attributed to chips in circulation but it could also be due to theft. I guess one can never be sure that a poker room is solvent?
Anyway, I’m pretty sure the Lodge has been operating on the level. I’ve known Bob, Rosa, and Jason since 2017 and have played with Jason on a number of occasions. As far as I’m aware there have never been any question of their ethical behavior by the community, whether in poker or in business.