Casinos Using Covid-19 to Try to Phase Out Cash

Rahm Emanuel, the former mayor of Chicago and chief of staff for Barack Obama, famously once said to never let a crisis go to waste. The casino industry is taking that advice in spades in the wake of coronavirus, and lobbying regulators to allow electronic payments, which currently are not allowed anywhere in the United States.

According to CNBC, the CDC generally recommended "tap-and-pay to limit handling of cash” in their Covid-19 hygiene guidelines, and casinos are pushing governments to let them in on that action. Nevada has a hearing on the matter on June 25th.

It's both sensible and dangerous that you can just read a story like this and know where it's going: Soon we're going to be able to use our phones to buy (and rebuy) chips at casinos.

It's sensible because carrying cash is inconvenient and in these days plausibly risky. Casinos are among the only places left that require it. Many states, including Nevada and New Jersey, have mobile sports betting where there's no option but to pay electronically. Why should physical casinos have to exclusively take cash when you can gamble without it outside their doors?

It's dangerous because it eliminates inhibitions with loss limits. When I go to a casino I bring in the amount of cash that I'm willing to lose. I'm not going to sit here and lie and say I've never lost that sum quickly and gone to the ATM. But, that walk to the ATM and subsequent $8 ATM fee also sometimes serve as deterrents to losing more money than I'm comfortable with. Further, when you're handing over cash, it feels much more like real money than hitting a couple buttons on a phone.

And then there's the fact that if you're playing a table game you're still going to be handling chips. Chips are probably more risky than cash because they pass through more hands at a faster rate. The CNBC story did have a guy from a mobile gambling payment processor predict that chips would eventually be phased out too, but it was an aside and didn't sound imminent.

By the way, casinos would be a lot less fun without chips. I played blackjack in Madrid this year in a casino where there were no chips. There was a live dealer, but the betting was done on a tablet. Changing bet sizes between hands was annoying. It was something I could never see myself getting used to, and made the game dramatically less communal and fun. (Also, I lost 100 Euros pretty quickly.)

I haven't been to a casino with all these plexiglass shields yet, so I really can't say how that impacts the experience. However, it seems safe to say it's not going to make gambling more fun.

Back to mobile payments: You can see where this is all going -- the only real question is how long it takes to get there.