A New Jersey man learned the hard way that not all casino chips carry cash value. After buying $59,000 worth of chips once intended for the now-closed Playboy Hotel and Casino, Keith Hawkins tried to redeem them—but courts shut that idea down.
The Playboy Hotel and Casino was among the early wave of Atlantic City casinos after gambling was legalized in New Jersey in the late 1970s. Though short-lived, the casino’s story reflects the shifting legal landscape of gambling in the state. Today, New Jersey allows multiple forms of legal gaming, including online casinos. Lawmakers are also working to curb unregulated sweepstakes casinos that have recently attracted attention.
Good to know
- The court ruled casino chips must have been in public circulation to qualify for redemption.
- The Playboy Hotel and Casino closed in 1984, and its unclaimed chips were covered by state-backed funds only if properly issued.
- Unissued chips taken by a former employee were never eligible for cashing out.
Hawkins bought 389 chips in 2022 through an internet auction. The chips were from the Atlantic City casino, which operated between 1981 and 1984. He believed they were still valid and took them to the New Jersey State Treasury Department’s Unclaimed Property Administration (UPA) for redemption in 2023.
But the UPA turned him down, saying the chips were never issued to the public during the casino’s operational years. That meant they weren’t part of the pool of unclaimed chips backed by funds the casino had turned over to the state when it closed.
Unlike chips that were used and unclaimed by players, these had never made it to the gaming floor. That made all the difference. A New Jersey appellate court sided with the UPA, confirming that the agency acted within its authority. The court’s written decision backed the UPA’s conclusion: the Playboy Hotel and Casino had never circulated these chips and had planned to destroy them.
The background of the chips came to light during a State Police investigation. After the casino’s closure, a third-party company was hired to dispose of leftover chips. A former employee admitted to secretly keeping boxes of unissued chips around 1990 and storing them in a bank deposit box. Years later, after the man went bankrupt, the bank opened the box and took possession of the contents.
In 2022, those chips were auctioned off and eventually purchased by Hawkins. Thinking he could redeem them, he took legal action after the UPA rejected his claim. But the court confirmed that since the chips were never approved for gaming use, Hawkins had no legitimate claim.
Even after closing, it seems the house still has the final say.
If you’d like to know more about this kind of matter, read our article about Casino Chips where we answer the question if they ever expire.
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