Credit Without Risk
Steve Karoul looks at whether Collateralised Casino Credit using Gold as Collateral. Is it right for your casino?
and oftentimes are based purely upon a players past record of “play and pay” at other casinos. Unfortunately, I have been on many collection trips where the player’s home address turned out to be a cemetery, an empty lot or where the player threatened physical bodily harm to me. Casino Collections can be dangerous in some countries especially in ones where casino debts are not recognized legally and therefore, are also not legally enforceable for collection proceedings.
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asinos around the world issue billions of dollars in credit every year. As much as casinos like to declare that this is with minimum
risk there is risk. There is always risk when one issues casino credit.
There is the risk of the player not paying for numerous reason such as his financial situation changed quickly, he is no longer liquid, he owes too many other casinos money and may decide to pay them first especially if he plays there more regularly than at your casino, etc., etc. We have all heard these types of excuses over the years. The other issue is fraud which is more prevalent in international casino credit transactions where decisions are not as structured as we would like
What can casinos do to better protect themselves from credit risks? Depending upon your gaming jurisdictions and regulations there may be some new creative options worth consideration. We hear a lot about ‘reverse mortgages’ today as an option for individuals above a certain age to remain in their own homes during rough financial times where they basically borrow against the equity that they have built up in their homes but in actuality, they pledge their home to the lender as collateral. The lender thereby allows the customer to live in their own home until their demise knowing that they will eventually take ownership of the home. It is an innovative new concept.
This concept enabled me to start to think outside of the box and take a closer look at casino credit from all angles trying to determine what are the ‘benefits’ to all parties. One perspective was to think like a consumer rather than as a casino operator and then try to develop a new innovative concept that made sense to all parties and that provided benefit to all parties. I also studied private banking to get a better understanding of how they developed relationships with their best customers.
After meeting with well over a dozen of the top Private Banks during my last job in Singapore I decided to work with a major international
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