Bet. Lose. Cut. Run!

[kayo]

from the Las Vegas Sun.....

Every year, the Strip's biggest casinos - the ones that cater to the whales and other high rollers - loan huge amounts of cash to keep some gamblers betting.

It's a calculated risk, because sometimes the players lose that money and skip town or even the country without paying their markers.

In one case , filed in June, Caesars Palace sued Thai gambler Suchart Arnupavatham, claiming that it had advanced him $4 million in markers, that he gambled and lost it all, and that he then fled to his native country without paying the casino a dime.

Ouch.

full story

http://www.lasvegassun.com/sunbin/stories/.../566684928.html

cant interpol grab his sorry arse and drag him back to the U.S.A ?

For what? It's an extremely gray area and most likely not a criminal offense but a civil offense. I don't think interpol wants to be regarded as a Vegas collection agency.

The casinos get these guys liquored up and extend them credit when they're on a losing streak and desperate. I don't feel sorry for the casinos at all; they should have a strict policy of 'cash up front only'.......but they don't because they're too <deleted> greedy.

To show you how much money they make from suckers.....every 'whale' that drops 1 million or more is usually given back 20-30%. YES GIVEN BACK PART OF THEIR LOSE. They know the whale will come back to their casino the next time he visits Vegas and they'll get another big chuck from this 'whale' who is actually just a fish

He'll be right back....

He had to make a visa run!

Wha?! ER... Oh! Never mind... You`ve all said it all already.

[Donz]

lol I would too.

i hope he gets away with it

Has anybody heard of such a thing called "personal integrity"?

One of the few things that you can take with you.

Not if you owe someone 4 million dollars

[aughie]

Eventually the casino accountants will move Khun Suchart's account receivable to Bad Debt Expense in the ledger. The bad debt can then be written off against income thus lowering the casino's tax liability. K. Suchart may wind up cheating the citizens of the State of Nevada out of tax revenue.

Oh please. The casino willingly lent their money to someone who failed to repay the debt. From what I understand, the same money ended up back in the hands of the casino as lost gambling bets. If the law allows the casinos to write this off as a loss then it is the tax laws that are cheating the citizens of the State of Nevada out of tax revenue. The Thai guy can only be accused of only cheating the casino.

The casinos also cheat the taxed folks in other ways. Many of the big "whales" from Asia will deposit money into an offshore account of the casino and their winnings and losings will be only be registered into that account. The entire trip and related expenses will be comped. The whale only need bring enough cash to buy souvenirs for the wife and kids.

The bad loan becomes a bad debt expense written of against income. But you are correct the money loaned when lost to the casino becomes revenue to the casino. $4mil lost on a bad loan. $4 mil gained in revenue. So it's a wash eh?

[quadricorrelator]

Eventually the casino accountants will move Khun Suchart's account receivable to Bad Debt Expense in the ledger. The bad debt can then be written off against income thus lowering the casino's tax liability. K. Suchart may wind up cheating the citizens of the State of Nevada out of tax revenue.

This is fascinating. It's true that the casino lent money to the gambler, but no money really left the casino so it didn't actually lose any money. However, for tax purposes, they can say they lost 4 million dollars, so their bottom line increases as a result of this.

Is this correct?

How much will their taxes decrease as a result of this write off?

I probably don't understand tax law, business, gambling. But, it seems like this is a tax loophole to me. My thinking is this: If the casino actually gave the guy money, and they lost the money from their business, then it would be fair to write it off. But, no money left their bank.

It does not seem the same as if they actually have less money now.

You're confused because the casino is wearing two hats. They're acting as loan agent and casino.

Example. I borrow 10,000 from a bank and lose it in a casino. I don't repay the loan.

The bank is out 10,000.

I borrow 10,000 from a casino. I lose it in the same casino. I don't repay the loan. The 'loan' side of the casino is out 10,000.

OR put another way......if I HAD REPAYED THE LOAN the casino would have 10,000 more.

Once a loan is made......if it's not paid back.....it's a 'bad debt' write-off. It does not matter where the money loaned went.

I think I might understand what seemed like an unfair situation, a little better now. At first, I couldn't understand why the law could allow lowered tax liability for the casino, when they never actually gave out any money. It seemed like a loophole. It doesn't seem like they are losing any money. It still didn't make sense that a casino should be allowed to wear two hats. As individual citizens, we are not allowed to wear two hats, why should the casino be allowed to do this?

But, I can see that an unrepayed loan can be thought of as a loss in the case of a casino, but not in the case of an individual. The casino needs the loaned out money to pay back other customers who win. The casino will have to pay out money from its own pocket to future winners (in some sense) if the loan is not repayed.

The degree of loss to the casino depends on the percentage of business that comes from loaned money as opposed to the percentage of business from those who put down money up front. I guess it is the same principle a bookie works on. They need losers to repay their loans or the casino won't be able to pay off the winners.

The bookie business and the casino business could not exist if they don't get their loans payed back (assuming that a large enough fraction of their business depends on loans).

Edited September 18, 2006 by quadricorrelator