Rolling Chip System
by Christine Duhaime, BA, JD, Certified Financial Crime and Anti-Money Laundering Law Specialist
A mud chip is an integral part of the VIP Rooms, or high-roller gambling system in Macau. It is known by various other names including a dead chip, rolling chips or non-negotiable chips. They are used in Macau predominently and are an integral way in which gambling with VIPs is done.
Pursuant to the mud chip system, casino operators sell (or advance) to junket operators, also known as VIP Room operators, certain volumes of non-negotiable casino chips at a deep discount. The junket operators sell mud chips to gamblers in the VIP Rooms for their actual face value. For example, a $10,000 chip is sold by the casino operator for $6,000 to the junket operator who then sell it for $10,000 to the gambler, making an instant $4,000 return. The return is theoretical because VIP Room junket operators often advance credit to gamblers from Mainland China and gambling debts incurred from the sale of mud chips must then be collected in China or Hong Kong after the gambling takes place.
There are often sub-contractors or sub-junkets in the process. Junket operators normally gurantee certain levels of purchases on a monthly basis to maintain their VIP Room agreements.