How to INDEPENDENTLY establish value of poker chips or a chip collection? (1 Viewer)

justsomedude

justsomedude

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Warning, long story ahead...

While going through our recent home purchase the underwriter flagged the deposit in my account from my recent chip sale as possible laundering and wanted us to independently establish the value of the chips sold. Since we were relying on said proceeds as part of our down-payment, we needed to clear this hurdle. When I asked our lender what they would accept, she told us that the underwriter was wanting to see some type of third-party "guide" or "catalog," as the links I sent to PCF classifieds were deemed insufficient.

I sent her the price list on CPC's website and links to other retailers selling Paulson sets (like Apache), but again, none of these were accepted by the underwriter. The underwriter was really open minded and wanting to work with us on this; we had numerous conference calls with our lender and underwriter, and I tried to explain the "collectible" nature of the poker chips and how prices can fluctuate wildly (as with any other collectible), but nothing we did met the underwriter's bar for establishing value.

In the end she was very apologetic and said her "hands were tied" with the independent valuation thing. She used the analogy of a coin shop... where she can call someone and get an immediate quote on a specific item... and that she was basically needing something similar with respect to the poker chips.

We ended up having to lean on a separate source of funds to get final approval to close, but I'm just wondering how one might deal with this situation in the future to avoid similar hiccups.
 
I believe the CCGTCC has/had a guide, but I haven't seen one in years (pre Boat chips) and it only valued individual chips.
 
Wow, that's something I'd never even thought about... I suppose with chip sets going for a goodly portion of a house downpayment or, in some of the folks around here, the actual cost of a house, this is a consideration.Thanks for sharing!
 
justsomedude said:
Warning, long story ahead...

While going through our recent home purchase the underwriter flagged the deposit in my account from my recent chip sale as possible laundering and wanted us to independently establish the value of the chips sold. Since we were relying on said proceeds as part of our down-payment, we needed to clear this hurdle. When I asked our lender what they would accept, she told us that the underwriter was wanting to see some type of third-party "guide" or "catalog," as the links I sent to PCF classifieds were deemed insufficient.

I sent her the price list on CPC's website and links to other retailers selling Paulson sets (like Apache), but again, none of these were accepted by the underwriter. The underwriter was really open minded and wanting to work with us on this; we had numerous conference calls with our lender and underwriter, and I tried to explain the "collectible" nature of the poker chips and how prices can fluctuate wildly (as with any other collectible), but nothing we did met the underwriter's bar for establishing value.

In the end she was very apologetic and said her "hands were tied" with the independent valuation thing. She used the analogy of a coin shop... where she can call someone and get an immediate quote on a specific item... and that she was basically needing something similar with respect to the poker chips.

We ended up having to lean on a separate source of funds to get final approval to close, but I'm just wondering how one might deal with this situation in the future to avoid similar hiccups.
Click to expand...
I had this same issue when I tried to get an insurance rider to cover my chips. They needed an appraisal to show value, but our market is the barometer of that.

I even looked into getting my appraisal certificate and seeing if it could be a vendor service.
 
liftapint said:
Similar to a call to a coin shop, could they call Spinettis?
Click to expand...
I thought of this right after we got off the conference call and decided to go in a different direction. This might actually be a viable alternative. Hindsight is always 20/20. :p

Poker Zombie said:
You could also ask if a notarized letter from the buyer would suffice. Obviously, that is putting someone else out, but I'm guessing the buyer might be willing if it meant the difference between getting the home and not.
Click to expand...
I asked about this approach and unfortunately this wouldn't work... as the buyer would be "in" on any potential laundering or malfeasance, and is thus deemed an unreliable source (from the underwriter's perspective). The "independent third party" is the bar that was set.

Josh Kifer said:
I had this same issue when I tried to get an insurance rider to cover my chips. They needed an appraisal to show value, but our market is the barometer of that.
Click to expand...
I was thinking the same and sent numerous links to other PCF classifieds, but for whatever reason the underwriter nixed all of them.

PS: For what it's worth the transaction ONLY became an issue because the large deposit appeared on one of my last 2-months of bank statements. If you clear a large transaction PRIOR to the 2-months of documentation required by your lender, it's likely it will never be seen and thus not be a problem. What I'm saying is... plan ahead. :)
 
justsomedude said:
I thought of this right after we got off the conference call and decided to go in a different direction. This might actually be a viable alternative. Hindsight is always 20/20. :p


I asked about this approach and unfortunately this wouldn't work... as the buyer would be "in" on any potential laundering or malfeasance, and is thus deemed an unreliable source (from the underwriter's perspective). The "independent third party" is the bar that was set.


I was thinking the same and sent numerous links to other PCF classifieds, but for whatever reason the underwriter nixed all of them.
Click to expand...
Yup, because they are based on personal evaluations, not a professional evaluation. If someone got the correct certifications and monitored the current sales rates.... I think it could be done.
 
Would they have accepted Spinettis if they didn't accept Apache, since they're both retailers? Is it that Spinettis might offer an appraised value of your exact chips, whereas Apache was just for "comps" (unless they happen to sell your exact chips too)?
 
Josh Kifer said:
I had this same issue when I tried to get an insurance rider to cover my chips. They needed an appraisal to show value, but our market is the barometer of that.

I even looked into getting my appraisal certificate and seeing if it could be a vendor service.
Click to expand...
KBB (Kifer Ben and Brie) chipping appraisals and home potato delivery services... I like the ring of that!

Obviously even if you had said license... you wouldn't be allowed to appraise your own chips.

And do the appraise like Jewelery? Double what its actually worth at all times? I know Chip Book values are actually way higher than the chops typically sell for, but from appraisal an stand point is that what you would go with?

Also how do we know if next week if someone is going to pay say... three times the going rate. Someone else says I will sell mine for 90% of that and suddenly $3 chips are worth? $8 - $8.50 the following week? Anybody want the job of keeping up with that? Lol

Also would that not be wide open for manipulation... I have no idea how you track the last two years of this hobby.
 
The Chip Rack might be useful for casino chips
1640722955227.jpeg
 
Ben8257 said:
Also would that not be wide open for manipulation... I have no idea how you track the last two years of this hobby.
Click to expand...
Most collectible markets are wide open for manipulation. History is rife with tales of laundering using high-end wine collections, artwork, and even now with NFTs.

Art/collectibles are massive markets for fraud. And appraisers are usually in on it (at least to some degree).
 
I was an auditor at one point. Kind of far off but I think a somewhat similar mindset for establishing value of odd assets. Links to forums or eBay sales are easy to manipulate or can be falsifiable and wouldn’t pass the sniff test with your boss asking questions. Getting a quote from a place like Spinettis which has been in business for a long time in this exact market is probably the best. Referencing the Chip Guide (or whatever that magazine is) would also add some weight. But I think a signed letter from Spinettis (about as close to an expert with verifiable credibility that you can get) would be the best bet.
 
It’s really interesting that you bring this up as I was literally just talking to my wife the other day about the potential AML implications associated with some of the high dollar chip listings/transactions. (We are both in the capital markets/Financial sector).

This is actually not surprising considering the current AML laws, and mortgage disclosure requirements post 2007 crash. Any large cash transaction (anything over $10k IIRC) triggers AML reporting. That alone is not necessarily a big deal, and is likely transparent to you, unless for purposes of mortgages, or other lending activities where collateral or cash reserves need to be validated.

The mortgage example is a really good real life example. This is a tough one as there really isn’t any valuation bench mark for many of the chip sets, specifically the NAGB chips that would pass the AML regulatory requirements.

As of now, a place like Spinettis or an notable auction house providing an appraisal is probably the most viable option. However, due to the nature and purpose of the AML rules, they have to have some way of validating the appraised value.. (much like a home appraisal, it’s more then just some guy’s opinion- there has to be some quantifiable basis for it)

This is an interesting one for sure.
 
If the point was to prove that funds weren’t coming from an illegal source, I don’t know how getting a third party appraisal on value helps. The conclusion can only be on the fairness of the sale. And then what? The only way is to ask the source of buyers funds (a tax return with a bank statement). But maybe I’m missing something…

Edit: it could also help to sell through a big, widely recognized public platform like eBay.
 
Last edited:
Budha said:
It’s really interesting that you bring this up as I was literally just talking to my wife the other day about the potential AML implications associated with some of the high dollar chip listings/transactions. (We are both in the capital markets/Financial sector).

This is actually not surprising considering the current AML laws, and mortgage disclosure requirements post 2007 crash. Any large cash transaction (anything over $10k IIRC) triggers AML reporting. That alone is not necessarily a big deal, and is likely transparent to you, unless for purposes of mortgages, or other lending activities where collateral or cash reserves need to be validated.

The mortgage example is a really good real life example. This is a tough one as there really isn’t any valuation bench mark for many of the chip sets, specifically the NAGB chips that would pass the AML regulatory requirements.

As of now, a place like Spinettis or an notable auction house providing an appraisal is probably the most viable option. However, due to the nature and purpose of the AML rules, they have to have some way of validating the appraised value.. (much like a home appraisal, it’s more then just some guy’s opinion- there has to be some quantifiable basis for it)

This is an interesting one for sure.
Click to expand...

Yeah I used to be a Compliance Director. It has been a while but Currency Transaction Reports are required to Fincen for aggregate cash transaction in excess of $10k. That doesn’t necessarily kick of an investigation or even any scrutiny. But depending on the circumstances, financial institutions usually will pay more attention to transactions that size or larger especially if frequent or appear to be layered.
 
PocketAces said:
If the point was to prove that funds weren’t coming from an illegal source, I don’t know how getting a third party appraisal on value helps. The conclusion can only be on the fairness of the sale. And then what? The only way is to ask the source of buyers funds (a tax return with a bank statement).

Edit: it could also help to sell through a big, widely recognized public platform like eBay.
Click to expand...

It's not the source that's in question, it's the bank's fear of fraud, and that I might be moving funds around in a manner that is not proper for the sake of increasing my net worth.

For example, and using an extreme... Say I needed $50,000 for a downpayment but didn't have it readily available. And say a friend or family member offered to loan me $50,000, but we don't want to deal with making it official so we can avoid tax/reporting/DTI implications and the effects of interest... so I "sell" him a box of Kleenex (exaggerating here to make a point) for $50,000. The bank would never go for this, because they'd see we're price-fixing the box of Kleenex to avoid the regulatory effects of what is actually a loan (while fraudulently boosting my own net worth).
 
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What the bank wants to make sure isn’t happening is that JustSoMeDude isn’t selling a pencil to his friend for $10,000 to secure a mortgage where JustSoMeDude and his friend have a repurchase agreement to sell the pencil back to him at $10,000 or more with the intention of inflating JustSoMeDudes assets to gain the mortgage. The purpose of valuing the chips is just to provide one aspect of legitimacy to the transaction from a not uncommon type of fraud.
 
justsomedude said:
It's not the source that's in question, it's the bank's fear of fraud, and that I might be moving funds around in a manner that is not proper.

For example, and using an extreme... Say I needed $50,000 for a downpayment but didn't have it readily available. And say a friend or family member offered to loan me $50,000, but we don't want to deal with making it official so we can avoid tax/reporting implications and the effects of interest... so I "sell" him a box of Kleenex (exaggerating here to make a point) for $50,000. The bank would never go for this, because they'd see we're price-fixing the box of Kleenex to avoid the regulatory effects of what is actually a loan (while fraudulently boosting my own net worth).
Click to expand...

Haha, very similar scenario as my pencil.
 
justsomedude said:
We ended up having to lean on a separate source of funds to get final approval to close, but I'm just wondering how one might deal with this situation in the future to avoid similar hiccups.
Click to expand...
Thank the underwriter very politely for her time and let her know as a courtesy that you'll be taking your business to another lender.
 
I would have asked @Tommy to write a letter for me as an independent owner/operator of the most prestigious poker chip collecting site on the internet (or Spinetti's). Might not have worked, but you don't know until you try....
 
justsomedude said:
I thought of this right after we got off the conference call and decided to go in a different direction. This might actually be a viable alternative. Hindsight is always 20/20. :p


I asked about this approach and unfortunately this wouldn't work... as the buyer would be "in" on any potential laundering or malfeasance, and is thus deemed an unreliable source (from the underwriter's perspective). The "independent third party" is the bar that was set.


I was thinking the same and sent numerous links to other PCF classifieds, but for whatever reason the underwriter nixed all of them.

PS: For what it's worth the transaction ONLY became an issue because the large deposit appeared on one of my last 2-months of bank statements. If you clear a large transaction PRIOR to the 2-months of documentation required by your lender, it's likely it will never be seen and thus not be a problem. What I'm saying is... plan ahead. :)
Click to expand...


yada yada yada..... after visiting PCF, underwriter now has over 20,000 chips in his collection.....
 

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