Lunch with a banker regarding Credit cards.

[Uborrow-Upay]

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@MattH wrote:

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  One basic difference is that I imagine casinos keep their risks entirely in house.  Perhaps the legal difficulties with collecting gambling debts in many States have actually been a good thing for the gaming industry because if gambling debts are a lot harder to sell off to third parties they might actually realize they must know their customers!  I've never heard of collateralized gambling debt derivatives being traded on secondary markets...

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An outstanding point!  Well said, MattH!

@Anonymous: Thanks for the link to the early Las Vegas pics/info!   How things have changed since then.  My first visits weren't 'til the late 60's, so some of that was before my time.  But if you like nostalgia, drop in and visit with Jackie G. at the El Cortez, he's still there most every day, he's great for stories about the old days, and the place hasn't changed much in all this time.  It's a grind joint, but a heckuva lot of fun!  Roulette, $1 tables?  Beats the Strip any day, and the locals are quite colorful! 

[Anonymous]

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@MattH wrote:

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@Anonymous wrote:

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@Anonymous wrote:
I'm sorry,I'm afraid I don't understand. You say a casino can pursue someone that writes a bad check to them,but I thought they verify with your bank if the funds are available before allowing you to cash check?

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Laws prohibit a bank from releasing EXACT BALANCE INFO of demand deposits (Checking and savings accounts) to outside parties, so what they do is called "RATING" accounts.

For example, if I was working and you approached me as a new customer and wanted to cash a check, for $500. Lets say it is 2:00 AM, on a Sunday morning. How can I accept the check, not being able to contact the bank?  After I gathered the standard info (ID, ACCT #'s) etc, I would enter it into the datebase used. Within a minute, I would get back a "rating" which would look like this:    08/02---L-4---0. If the average person sees that it would mean nothing but to me it would say a lot.

Using the example above and also using as an example this was to have happened last weekend, here is what I would do.  You wish to cash a $500 check. Here is what I have learned from the rating I got back.  I have learned your ACCT was opened in Aug, of 2002,  (08/02)   I have learned your AVERAGE BALANCE is Low 4 Figures, (L-4)  Figures rating work like this:  Low means 1,2,3, Medium means 4,5,6, and High means 7,8,9. As for the "4" that relates to ZERO's, SO, I have learned your AVERAGE ACCOUNT BALANCE is between $1000-$3000 Dollars, The "0" as the last bit of info I received tells me you have had NO ADVERSE ACCOUNT ACTIVITY (bounced checks, overdrafts, etc) in the LAST 12 MONTHS.

NOW, here is where I (or the floor supervisor) makes a decision. YOU want to cash a check for $500. I KNOW you have had an ACCT for seven years,your average balance is $1000-$3000 dollars and you have no history of bad activity on your account. WHAT this tells me is that the "ODDS ARE IN OUR FAVOR" your check is good or you would make it good. VERY SIMPLE and remember, a casino runs on "odds" in its favor. ACTUALLY under the scenario I described, I would take your check up to probably $1000 or $1500.

THEN AGAIN, there is the other side of the spectrum. A person walks up and wants to cash a check for $100. (Again assuming it was last weekend) I enter the data and get the follwing rating.  06/09---L-1---8.  Hopefully all of you can figure out my response would be a NO, but a "gracious casino no". I would inform you that I was unable to get enough information to do it and would you please stop by the main cashier cage when it opens and they can help you by contacting your bank. (Always the gracious host)

Like I said, we are able to access enough info to make decisions and banks are able to protect the privacy of their clients by not releasing EXACT INFO, so it works well for everyone.

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Fascinating, I knew absolutely nothing about the world of check approvals, which of course is yet another situation in which a business needs to make a real-time decision about a customer.  Nor do I know anything about casinos, but of course casinos are not the only type of business that sometimes takes personal checks.  I gather the basic difference between a check and use of a debit card is that with a debit card the money is immediately taken out of the person's account so there is neither float nor bouncing with debit card transactions.  Not that I ever depend on float, and the one time I overdrew my account due to an arithmetic error back in 1979 (I was a college student then) the branch manager called me (it was a local bank where they actually knew their customers) and I made it good so it didn't bounce.  He even waived the penalty since it was my first time and I came in right away when he called.  Nowadays nearly all the activity on my checking account is electronic transactions, and non-debit-card transactions are mostly paying companies to whom I already owe money, I can't recall when last I cashed a check.

I do wonder if the banking industry could learn some things about risk management from the casion industry?  Fundamentally both are in the business of taking calculated risks based on probability, but maybe casinos do a better job of calculating those risks.  One basic difference is that I imagine casinos keep their risks entirely in house.  Perhaps the legal difficulties with collecting gambling debts in many States have actually been a good thing for the gaming industry because if gambling debts are a lot harder to sell off to third parties they might actually realize they must know their customers!  I've never heard of collateralized gambling debt derivatives being traded on secondary markets...

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Those are GREAT POINTS Matt. You hit the nail right on the head, about keeping risks "in house". Also, the Casinos do not have a HUGE POOL OF MONEY they can go and draw on at any time (FEDERAL RESERVE BANK). Not having access to unlimited funds (OR BAILOUTS) casinos have to be more prudent about their resources.

In many ways casinos are much more regulated then banks in financial dealings and in ways most people would not think off. A casino is required to always have on hand a LARGE AMOUNT of cash, because they are obligated to pay a winner in cash if they desire. People don't realize it but when you have a bank acct, the bank can actually make you wait when you close your acct for your funds. NO, as a rule they will not, BUT if you read the print, that provision is in there. A casino can not do that.

You are right, casinos do need to know their customers a bit better. I always thought that was a good thing, but sadly it has disappeared from so many banking institutions.

[creditwherecreditisdue]

You may have to wait for your funds when closing a bank account to allow any uncleared obligations to reach the bank and be processed.

[MsKiwi]

Fascinating info.

[Anonymous]

Thank you sir,for such an in depth response to my question. I have a better understanding now. It's amazing (in a good way) how the casinos,even though they are competitors relay info to one another about customers attempting to cash checks or obtain markers.

This thread has been most informative,even if we did get off the subject matter.

Again,thanks

[Anonymous]

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@Anonymous wrote:

Thank you sir,for such an in depth response to my question. I have a better understanding now. It's amazing (in a good way) how the casinos,even though they are competitors relay info to one another about customers attempting to cash checks or obtain markers.

This thread has been most informative,even if we did get off the subject matter.

Again,thanks

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First, WELCOME to the forums. It was a pleasure answering your question.

Glad you have enjoyed this thread. Yes, it has gotten a bit off the subject but I personally blame the OP. Everyone knows he is an old fella and probably nearing senility, BUT the gracious people here tolerate his ramblings.

[plasticman]

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@Anonymous wrote:

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@Anonymous wrote:

Thank you sir,for such an in depth response to my question. I have a better understanding now. It's amazing (in a good way) how the casinos,even though they are competitors relay info to one another about customers attempting to cash checks or obtain markers.

This thread has been most informative,even if we did get off the subject matter.

Again,thanks

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First, WELCOME to the forums. It was a pleasure answering your question.

Glad you have enjoyed this thread. Yes, it has gotten a bit off the subject but I personally blame the OP. Everyone knows he is an old fella and probably nearing senility, BUT the gracious people here tolerate his ramblings.

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[Uborrow-Upay]

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@Anonymous wrote:

Yes, it has gotten a bit off the subject but I personally blame the OP. Everyone knows he is an old fella and probably nearing senility, BUT the gracious people here tolerate his ramblings.

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LOL!

However, I don't think this thread has gotten off-topic whatsoever (aside from the personal asides, mea culpa).  You've given us an overview of how casinos handle check verifications and the extensions of credit, while limiting losses and maximizing revenues.

The banking industry seems eager to emulate those procedures, so for us to understand fully what may be implemented by banks in the future, we've got to know how the casinos handle these things now.  The real-time database sharing seems to be the key!

And by the way, for those of you with rewards cards...thank the casinos!  Where do you think the banks got the idea from?

[plasticman]

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@Uborrow-Upay wrote:

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@Anonymous wrote:

Yes, it has gotten a bit off the subject but I personally blame the OP. Everyone knows he is an old fella and probably nearing senility, BUT the gracious people here tolerate his ramblings.

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LOL!

However, I don't think this thread has gotten off-topic whatsoever (aside from the personal asides, mea culpa).  You've given us an overview of how casinos handle check verifications and the extensions of credit, while limiting losses and maximizing revenues.

The banking industry seems eager to emulate those procedures, so for us to understand fully what may be implemented by banks in the future, we've got to know how the casinos handle these things now.  The real-time database sharing seems to be the key!

And by the way, for those of you with rewards cards...thank the casinos!  Where do you think the banks got the idea from?

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+1

Besides, even if the thread changed OT, the OP can take their thread OT from the original post if the OP chooses. Moderators please correct me if I am wrong.

Shame on you DickC, I am still LMAO.

[Anonymous]

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@Uborrow-Upay wrote:

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@Anonymous wrote:

Yes, it has gotten a bit off the subject but I personally blame the OP. Everyone knows he is an old fella and probably nearing senility, BUT the gracious people here tolerate his ramblings.

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LOL!

However, I don't think this thread has gotten off-topic whatsoever (aside from the personal asides, mea culpa).  You've given us an overview of how casinos handle check verifications and the extensions of credit, while limiting losses and maximizing revenues.

The banking industry seems eager to emulate those procedures, so for us to understand fully what may be implemented by banks in the future, we've got to know how the casinos handle these things now.  The real-time database sharing seems to be the key!

And by the way, for those of you with rewards cards...thank the casinos!  Where do you think the banks got the idea from?

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I have no doubt you are 100% correct that the key is having the real time database and sharing that info.  You are also correct about REWARD CARDS, as yes they are a product that many have adapted from the Casinos.

Sadly, we live in a world where 'preception" is important. One thing I always respected about the gaming Industry is that it never gets caught up in it.

As I mentioned, my friend at US BANK was astonished the amount of "sharing" casino's do. I explained to him the reason is that their is a certain bias by some about the business so Casino's operate under the thoughts that if one casino is tainted, ALL CASINO'S ARE TAINTED.

When something bad happens to a Bank if it is not yours, most people don't care but HONESTLY LOOK at how Las Vegas is preceived. "SIN CITY" so they have to stick together. Many times over the years we would send employees to other Casino's who might have a epidemic of sickness, etc, to help them out. I remember once during "March Madness (NCAA Basketball Tournament, which is a huge betting time in the Sportsbook) that our electrical shorted out and we were going to be down for over a day. We made a call to the MGM and they instantly set up a seperate area where our patrons could come and bet and seperated the proceeds so we would get what we normally would take in. I just can't see if BOA is down for a day, that CHASE or any other bank would welcome their depositors and put money into their BOA accts.

Maybe there are things Banks can learn from the Gaming Industry. If nothing else, they could learn a lot from them regarding Customer Service as mistreating a customer is never tolerated in the gaming industry and it does not matter if its a nickel slot machine player or a $1000 a hand Blackjack Player.

Perhaps with things changing in the industry, bankers will start to realize that THEY NEED CUSTOMERS and need to cultivate them, as Casino's do. We can only hope they learn that lesson.