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Museum of Gaming History An Educational Project of The Casino Chip & Gaming Token Collectors Club, Inc. An IRS approved 501 (c) (3) Tax Exempt Not-For-Profit Corporation
Dedicated to the preservation and education of Gaming History
In the coin hobby, slabbing is very popular among dealers and collectors.
Yet the concept of slabbing casino chips has been met with vehement opposition.
Why is that?
Here is a brief explanation of slabbing, for those who are not familiar with
the term. A coin is submitted to a company that provides a slabbing service.
The coin is then individually reviewed by several experts who each render
an opinion on the coin's authenticity and grade. A final grader assigns the
grade based on the committee's opinions. The coin is then placed in a tamper-proof
inert plastic container, which is also known as a slab. The intent is to guarantee
that the coin inside the slab is genuine, original and in the condition indicated
by the grade. While not all coin collectors and dealers like slabbed coins,
slabbing does provide certain benefits:
Grading - there are several contending standards for grading coins;
there is no universally accepted standard. Some dealers routinely over grade
their coins. As long as they accept returns, this practice is OK with the
ANA. The ANA is the American Numismatic Association, the equivalent of the
CC>CC in the coin hobby. What sounds like a deplorable practice is
tolerated because grading is subjective, it is an opinion, it is not the
result of a scientific process. There has to be some leeway between the
opinions of different individuals and this leaves room for the less honest
dealers to take advantage of less knowledgeable collectors. There are so
many different grades that are assigned to coins, there could be as many
as 70, that you need to be an expert in order to accurately grade coins.
Collectors are generally not expert enough to detect the minor differences
that will determine the grade of a coin. Since you cannot always rely on
dealers to grade accurately, having an independent organization grading
coins makes sense, especially when a difference in one grade to the next
could mean the coin is worth $1,000 or even $10,000 or more in some cases.
Authentication - coin "doctors" can counterfeit or alter a coin
to make it appear to be a rarer variety, year, mintage or a better grade.
Counterfeit and altered coins are major problem in the coin hobby. In fact,
the Numismatists, the monthly publication of the ANA, has (or use to have)
an article in each issue listing newly discovered counterfeit coins. Experts
at the grading services are able to detect counterfeits and alterations.
Coins that are encapsulated are guaranteed by the grading services to be
authentic. Coins cannot be cleaned without causing some damage to the coin,
although its appearance to the naked eye may substantially improve. Cleaning
a coin greatly reduces its value. Some coin "doctors" can clean a coin so
expertly, that only an expert with the proper equipment can detect the cleaning.
Most grading services will not encapsulate a cleaned coin.
Protection - coins are subject to deterioration from the elements.
Once encapsulated in an inert container, a slab, a coin is no longer exposed
to harmful chemicals in the atmosphere that can damage the surface of the
coin. A slabbed coin is also protected from fingerprints and most other
types of physical damage.
In the coin hobby grading, authentication and protection are very real needs
to collectors. Slabbing allows a collector to buy a coin that is authentic,
properly graded (within a limited range) that also comes with its own protection.
I would say that virtually every coin collector has at one time or another
owned an over graded, counterfeit, altered or cleaned coin without their knowing
about it. I know that I have, many times. If I still collected coins, I would
not buy an expensive coin, which was not slabbed. The slabbing is a form of
insurance. A new collector with limited knowledge of the hobby can confidently
build a collection or rare coins, if they are slabbed. In the coin hobby,
slabbing provides a service that was eagerly sought by collectors because
of the abuses they suffered from disreputable dealers.
If slabbing coins is so beneficial to the hobby, why then do collectors oppose
the slabbing of casino chips?
Simply stated, the coin and chip collecting hobbies are different. The biggest
difference is that chip dealers are honest. In the hundreds or perhaps thousands
of chip transactions I have been involved in, I have not felt that I have
been taken advantage of even once. The only exception I would make is that
sometimes a previously rare chip has been found in some quantity. There is
a problem that some dealers are not forthcoming about the new discovery and
continue to sell the once rare chips at what are now inflated prices. In this
case, slabbing would not provide any benefit in this situation.
Grading, authentication and protection are not anywhere as important to chip
collectors are they are to coin collectors:
Grading: Chip grading is relatively simple. Although there is not
a universally accepted grading standard for casino chips, one is not really
needed because most of us accept the five levels of grades that are commonly
used: new, slightly used, used, worn and damaged. The grades are intuitive
and easily recognized, even by newcomers to the hobby. A grading service
would not provide any value add to the chip collecting hobby.
Authentication: I only know of one chip that was counterfeited,
a $25 chip from the Fremont casino in Las Vegas. When this counterfeit was
discovered, the dealer who was selling the chips (who was not the counterfeiter)
did the right thing and offered refunds immediately. If counterfeiting becomes
more of an issue in the future, collectors will need some way to better
authenticate casino chips. Unlike coins, casino chips are made to take a
lot of abuse and can be easily cleaned to remove dirt without damaging the
chip. A casino chip that has been properly cleaned is likely to be more
desirable to collectors and worth more than when it was dirty. Counterfeiting
and alterations are not a problem for casino chip collectors and slabbing
services again will not be providing an value add in this area.
Protection: Casino chips, for the most part, are very sturdy and
are not subject to any kind of decay from the elements. I have seen a few
casino chips that have been discolored from exposure to sunlight or fluorescent
light and collectors should take care to avoid this. Collectors put their
chips into some kind of holder, but do so as a way to store and show off
their chips, not really as a way to protect them. One thing to think about,
chip collections take up a lot of room now, casino chips in slabs will take
up several times as much room. Chip collectors will not want to encase their
chips in slabs as a means of protection.
Slabs allow viewing both sides of a chip or coin. In reality chips have a
third side, the edge. On some chips, the edge may have valuable information
for the collector. The easiest way for a collector to assess wear on a chip
is by looking at its edge. This is usually where wear occurs first in the
form of small nicks. The edge markings, especially on newer chip designs from
manufacturers like Chipco and Bud Jones are used in identifying chips. When
in a slab you will not be able to fully see the edge of a chip.
There are other problems and abuses that occur with slabbing, which I will
not go into in any detail. Suffice it to say that even if these abuses did
not occur, there still would not be any need for slabbing chips for the reasons
I've outlined above. As an example of one of the many abuses, the slabbing
companies grade the most common, currently minted coins that are in excellent
condition. In the coin hobby, a perfect coin has a grade of MS-70; near perfect
would be MS-68 or MS-69. Coins in these lofty grades are sold for outrageous
amounts of money to less knowledgeable collectors. Can you image spending
$50 for a quarter that was minted in the last year that has a mintage of say
1,000,000,000? Would you be willing to spend $50 for a Four Queens $1 chip
that was issued this year, but is fresh from the cage and slabbed? It sounds
ridiculous and it is. If you cracked that quarter of the slab, do you know
how much it would be worth? Exactly 25 cents. Slabbing has created an artificial
market that is bound to crash at some point.
Slabbing has no place in the chip collecting hobby. We do not need slabbing
for its intended purposes, grading, authentication and protection, and we
certainly do not need the abuses that will come along with it.