Does GPI/Paulson Really Care? (2 Viewers)

ImCrossland

ImCrossland

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After seeing the similarities between a newer casino chip and a previously made one, it got me thinking…

Is there any definitive evidence that GPI/Paulson doesn’t sell to the home market specifically for security concerns? I understand the logic behind it but I’m wondering if there’s ever been any statement put out by GPI or official correspondence shared that confirmed it.

I don’t know…seems like their in-house folks sure let a lot of ”similar” chips get made, regardless of who orders them. I’m sure there’s some kind of sophisticated technology built into the newer Horseshoe $100 chip, so I guess it’s just a bit of a head scratcher to hear how chip security is a particularly important reason why GPI doesn’t sell directly to the home market.

I understand the arguments made about home demand being comparatively smaller than casino demand. This ramble is only about the chip security argument I’ve heard so much.

Feels like a convincing fake could be produced with this chip, aside from any unique technology built into each chip. Ramble over.

7652E728-91A3-45F9-9B74-336ECB323AEB.jpeg

I know they’re not identical, but they’re probably similar enough to get confused by the untrained eye.
 
1st, I dislike that spot pattern.
2nd, I can imagine GPI could rationalize that situation by saying that the Jumers chips should have cost $100 apiece and its not their fault that the Jumers chips got sold to the public for $5 apiece.
3rd, because of #2 and #4, it seems like GPI's professed security is more marketing bullshit that actual reality
4th - they just produced and sold those Tiger chips including cash chips of $1k, $5k, and $25k that had zero security measures built in - you'd have to be a child to believe those Tiger chips were actually going to a casino, so GPI is either lax in its internal oversight, or full of shit, or both.

EDIT: I'm told #4 is untrue. Apologies for the inaccuracy.
 
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upNdown said:
1st, I dislike that spot pattern.
2nd, I can imagine GPI could rationalize that situation by saying that the Jumers chips should have cost $100 apiece and its not their fault that the Jumers chips got sold to the public for $5 apiece.
3rd, because of #2 and #4, it seems like GPI's professed security is more marketing bullshit that actual reality
4th - they just produced and sold those Tiger chips including cash chips of $1k, $5k, and $25k that had zero security measures built in - you'd have to be a child to believe those Tiger chips were actually going to a casino, so GPI is either lax in its internal oversight, or full of shit, or both.
Click to expand...
@JeepologyOffroad has stated here recently MANY TIMES The 25k tiger chips deff have GPI security features. Not sure about the 5k down.
 
My suspicion is there is someone at GPI who OK's submissions by checking against what has been done before simply by checking a spreadsheet or database.

Spot design 35 (or whatever this is), gray and orange doesn't match spots design 35 with tan and blaze spots. OK'ed for production.

To our eyes and these photos, they are pretty close. Even sifting through my Paulson color set, there are many colors that are quite close to each other despite being different by name.

Photos from different cameras in different light at different times make these look super close. Until I see a photo of the two side by side, I believe that a Jumers that's relabeled and introduced into a stack of Horsehoe 100s will stick out.

At the tables and cage, my guess is there are no "untrained eyes". If these are as different as I suspect they are, they'll stick out.
 
AlbinoDragon said:
My suspicion is there is someone at GPI who OK's submissions by checking against what has been done before simply by checking a spreadsheet or database.

Spot design 35 (or whatever this is), gray and orange doesn't match spots design 35 with tan and blaze spots. OK'ed for production.

To our eyes and these photos, they are pretty close. Even sifting through my Paulson color set, there are many colors that are quite close to each other despite being different by name.

Photos from different cameras in different light at different times make these look super close. Until I see a photo of the two side by side, I believe that a Jumers that's relabeled and introduced into a stack of Horsehoe 100s will stick out.

At the tables and cage, my guess is there are no "untrained eyes". If these are as different as I suspect they are, they'll stick out.
Click to expand...
My local Indian casino uses TINA blank molds. Most the blackjack tables/dealers take the chips back and issue tickets for the cage. Poker room still has the OG method of holding racks. I suspect casinos all probably have amazing insurance and in the long run probably care less. My local casino does not care I can order the exact live chips. They truly don’t. I’ve personally mentioned it at the board meetings, no one blinked an eye. I guess if I had a gambling license I’d let the DOJ and FBI handle it, after I billed my amazing insurance of course. Game on!
 
D2ED82D1-7A68-4F7C-B112-C49C7EB633FF.png

GPI’s revenue in 2018 was ~$90M with an operating income of $4.8M before they were acquired by Angel. Looked like they were growing healthily as well hence they got acquired.

Skeptical they’d be interested even for a million dollar home business line. The cost to serve and distribute to consumer vs B2B would also eat into their margins.
 
SpaceMonkey420 said:
My local Indian casino uses TINA blank molds. Most the blackjack tables/dealers take the chips back and issue tickets for the cage. Poker room still has the OG method of holding racks. I suspect casinos all probably have amazing insurance and in the long run probably care less. My local casino does not care I can order the exact live chips. They truly don’t. I’ve personally mentioned it at the board meetings, no one blinked an eye. I guess if I had a gambling license I’d let the DOJ and FBI handle it, after I billed my amazing insurance of course. Game on!
Click to expand...
It's fascinating to me that a casino that's been around since 1993 doesn't care about chip security.
It looks like they've always used garbage chips, and maybe they figure if a $25 is their biggest chip, their exposure is minimized. Or maybe the casino business is so lucrative that they don't care. But either way, it's surprising.
http://chipguide.themogh.org/cg_chip2.php?id=CAREWR&v=1416766152
Also, if they put a $ and NCV on their tournament chips, they're dumbasses. Your casino is suspect.
winriv.jpg
 
upNdown said:
It's fascinating to me that a casino that's been around since 1993 doesn't care about chip security.
It looks like they've always used garbage chips, and maybe they figure if a $25 is their biggest chip, their exposure is minimized. Or maybe the casino business is so lucrative that they don't care. But either way, it's surprising.
http://chipguide.themogh.org/cg_chip2.php?id=CAREWR&v=1416766152
Click to expand...
They go well above $25. I’ve personally had a live $5000 and own several old versions of $100 plus. The current live $100 are black solid Tina no molds same design. Purple is $500. Whites are 5k with purple spots.

I got the memo It’s called insurance. Lots of it.
 
upNdown said:
And those are also Tina chips?
Click to expand...
Most recent were chipco. Old school were plastic. Current are all Tina no molds.

These $5 are not LIVE (regardless of what this site says) and I know as I was lucky enough to buy the majority hoard for .10 cents a chip. I made 12 massive playable poker sets with them. One was stolen from a friends trailer off highway 299 and have yet to be found.. The rest are being used in home games, including mine from time to time.

E71C73A6-2E95-4946-B6E3-6BD5A7C74B07.jpeg



Ps. These are not new issues to the casino. Pretty sure we all could of had these duplicated on ceramic blanks when they were live a few years ago.
 
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SpaceMonkey420 said:
My local Indian casino uses TINA blank molds. Most the blackjack tables/dealers take the chips back and issue tickets for the cage. Poker room still has the OG method of holding racks. I suspect casinos all probably have amazing insurance and in the long run probably care less. My local casino does not care I can order the exact live chips. They truly don’t. I’ve personally mentioned it at the board meetings, no one blinked an eye. I guess if I had a gambling license I’d let the DOJ and FBI handle it, after I billed my amazing insurance of course. Game on!
Click to expand...

Thinking on this some - Unless they pull the “fake chips” out of circulation in the casino it really doesn’t matter to them, they are used as placeholders for money passing through and until they are removed from circulation they still do the same job as “real chips”. The casino just didn’t buy them, but they can use them and they work
just the same as if they did buy them.

It’s a mass balance problem, draw your boundary around the casino, label your inflows and outflows (inflows =new customers money, new customers with valid chips, and fake chips in, outflows = customers cashing money, customers taking chips uncashed, and no fake chips out) and it just becomes “accumulation” as long as the casino allows it to be in play - inside the casino.


It seems as if the casino would be out the “fake chips” but as long as they continue to circulate them on the floor, they are just floating around, being exchanged for customer cash and being used the same as any other chips. Only when the casino internally removes the “accumulation” will they actually be losing money from the system.
So yes, if there was a point where the casino cashed out every chip in the building (or inthe world) it would be a loss, but that’s not what they do.
Hell, the “accumulation” may not even keep up with the losses (people taking chips and not cashing them out, so it’s not a fiscal loss but it is a mass balance loss) so it may actually help them not introduce new stock chips as frequently.

Draw the picture and then solve the balance. The results sound wonky but whatever. It’s science.
 
fishsaybloop said:
View attachment 1055800
GPI’s revenue in 2018 was ~$90M with an operating income of $4.8M before they were acquired by Angel. Looked like they were growing healthily as well hence they got acquired.

Skeptical they’d be interested even for a million dollar home business line. The cost to serve and distribute to consumer vs B2B would also eat into their margins.
Click to expand...
But if they’re charging home customers over double what casinos are paying does that really eat into their profits or help pad them?
 
fishsaybloop said:
View attachment 1055800
GPI’s revenue in 2018 was ~$90M with an operating income of $4.8M before they were acquired by Angel. Looked like they were growing healthily as well hence they got acquired.

Skeptical they’d be interested even for a million dollar home business line. The cost to serve and distribute to consumer vs B2B would also eat into their margins.
Click to expand...
this needs to be stickied somewhere.
 
So they have UV and other security features on bigger chips that is checked at the cage. But what about ever playing spot on the casino floor? Is every blackjack betting spot, every inch of a crap table have rfid sensors? Or poker tables? Can some security features be seen from surveillance?

This just blows my mind. I think the casinos just make so much damn money, they probably figured out how many Jumers 100's were made, and just said F$%#K it, that is like a few hours of profits on a good Friday night, just let em come and try.
 
I made this post in a different thread back in May, but the texture of the discussion here re. Paulson revenue made me search for it:

https://www.pokerchipforum.com/threads/market-situations.89897/#post-1849604

This was a result of a long exposure at the telescope and a little bit of time to do the thought experiment, the back-of-the-envelope math and write up I posted there.
 
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There are 3 problems that I see from a product management perspective:

1) Messaging to the market. Selling to the public makes them unable to represent to casinos - their primary customer - that their chips are secure. This is all over their marketing material on their website. GPI perceives that chip security is a huge market differentiator for them, and they likely think that selling gaming tokens the public cheapens this message to a degree.

Regarding the “oh well a different mold to the public” strategy - several people here have already pointed out that casino staff don’t know anything about edgespots versus molds versus inlay design, etc. The buyers are casinos will be even less aware of what mold(s) are or aren’t used by the public vs licensed gaming properties.

2) Cost. GPI is accustomed to dealing with a single buyer resource at the casino and having the design and ordering phase be relatively quick and easy. I know from being on the periphery of our GB that we had a lot more interaction with the Paulson sales rep than he was accustomed to for the number of chips we ordered.

The cost of sales for a public market would be substantially high which brings us to point #3.

3) Lack of accurate forecasting. Assuming for the moment that they were able to differentiate the chip production - maybe via a named subsidiary - and had determined that they could offer reduced options for base colors, edge colors and edgespot types, and streamline the ordering process (maybe even automate it) and keep their cost of sales down — this is still a lot of investment that they would need to fund to attack the consumer market.

If they’re a $100M company, investing $1-2M (which is cheap, really) in the requirements to service consumers is a substantial cost. If their profit contribution was 4.5M last year you’re talking about cutting their profitability in half.

If they’re going to do that, they need to have a really good feel for how many chips they can effectively sell for a sustained period (years) and what their price point needs to be. There needs to be a return on investment analysis that makes sense for their financial goals and motivates them to make this large investment.

Maybe if there was an intermediary like Apache, who had a couple designs that were wildly popular, and if Paulson could easily differentiate the consumer vs commercial product lines for lazy-minded casino executive buyers - maybe an Apache type firm could make a financial commitment to Paulson to buy a certain amount of chips annually for a 3 or 5 year period to make it worth Paulson’s while. And they wouldn’t be complete customs.

I’m probably missing 5 other challenges too, but from just a basic product perspective those were the likely 3 issues that jumped out at me re: GPI attacking the home market.
 
fishsaybloop said:
View attachment 1055800
GPI’s revenue in 2018 was ~$90M with an operating income of $4.8M before they were acquired by Angel. Looked like they were growing healthily as well hence they got acquired.

Skeptical they’d be interested even for a million dollar home business line. The cost to serve and distribute to consumer vs B2B would also eat into their margins.
Click to expand...
4.8M out of 90M. yikes.
 
bergs said:
There are 3 problems that I see from a product management perspective:

1) Messaging to the market. Selling to the public makes them unable to represent to casinos - their primary customer - that their chips are secure. This is all over their marketing material on their website. GPI perceives that chip security is a huge market differentiator for them, and they likely think that selling gaming tokens the public cheapens this message to a degree.

Regarding the “oh well a different mold to the public” strategy - several people here have already pointed out that casino staff don’t know anything about edgespots versus molds versus inlay design, etc. The buyers are casinos will be even less aware of what mold(s) are or aren’t used by the public vs licensed gaming properties.

2) Cost. GPI is accustomed to dealing with a single buyer resource at the casino and having the design and ordering phase be relatively quick and easy. I know from being on the periphery of our GB that we had a lot more interaction with the Paulson sales rep than he was accustomed to for the number of chips we ordered.

The cost of sales for a public market would be substantially high which brings us to point #3.

3) Lack of accurate forecasting. Assuming for the moment that they were able to differentiate the chip production - maybe via a named subsidiary - and had determined that they could offer reduced options for base colors, edge colors and edgespot types, and streamline the ordering process (maybe even automate it) and keep their cost of sales down — this is still a lot of investment that they would need to fund to attack the consumer market.

If they’re a $100M company, investing $1-2M (which is cheap, really) in the requirements to service consumers is a substantial cost. If their profit contribution was 4.5M last year you’re talking about cutting their profitability in half.

If they’re going to do that, they need to have a really good feel for how many chips they can effectively sell for a sustained period (years) and what their price point needs to be. There needs to be a return on investment analysis that makes sense for their financial goals and motivates them to make this large investment.

Maybe if there was an intermediary like Apache, who had a couple designs that were wildly popular, and if Paulson could easily differentiate the consumer vs commercial product lines for lazy-minded casino executive buyers - maybe an Apache type firm could make a financial commitment to Paulson to buy a certain amount of chips annually for a 3 or 5 year period to make it worth Paulson’s while. And they wouldn’t be complete customs.

I’m probably missing 5 other challenges too, but from just a basic product perspective those were the likely 3 issues that jumped out at me re: GPI attacking the home market.
Click to expand...
This. There’s currently no good end consumer sales channel in poker chips and growing a B2C e-commerce business will eat them up on marketing expenses.

If someone could forecast it, they should prob pitch the biz idea to GPI and run their consumer business / take salary in chips ◡̈

johnjohn said:
4.8M out of 90M. yikes.
Click to expand...
5% operating margin is tight. Not to mention their fixed costs takes it down to under 4% on net income.
 
Thought I saw somewhere that Apache (Josh) rolled by their table at the Con this year and threw out a guaranteed 100k buy to see if anyone would even talk to him and there was 0 interest. Not a million, but if they won’t even talk to you for a 100k sale to see what else you might have, does not sound as if they have any interest in dealing with even a reseller type situation. Will try to find the thread.

Edit: It was actually 500k that he offered

https://www.pokerchipforum.com/threads/g2e-2022-report.96183/#post-1993550
 
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