Why Be Slab Free?
In mid-December, 2000 there was an attempt by a coin grading/encapsulating firm to introduce slabbed casino chips into the chip collecting hobby.
For those who are not familiar with this term, slabbing is a process whereby a firm who traditionally has provided this "service" in the coin industry, charges a fee ($10 has been suggested) for a chip collector to submit a single casino chip to this firm to be evaluated as to condition and an arbitrary grade is assigned. The chip is then permanently sealed into a plastic case with a registration number, and the arbitrarily assigned grade is clearly visible. This now-slabbed chip is returned to the owner usually within two weeks at the owner's additional expense.
This slabbing company does not guarantee the grade assigned. It is merely the opinion of the grading company's employee(s) who are examining the chip at that particular point in time. The slabbing firm has no interest in purchasing or selling slabbed chips. Their whole purpose of their existence is strictly financial in that they depend upon huge quantities of chips to be submitted for evaluations at $10 per opinion. An employee (grader) who originally graded a particular chip, may not be employed at the firm one month, six months, or a year later.
It is not unusual in the coin industry for the slab to be physically cracked open with force, the coin removed, and is re-submitted either to the same grading company, or another one, in the hopes that it will come back at a higher grade than it had previously. Variations of one or two points on certain coins could mean a difference in price of hundreds or thousands of dollars.
It is for this primary reason (and others) that more than 400 online members of the Casino Chips and Gaming Tokens Collectors Club (CC>CC) do not wish to see this unwarranted development take place in the chip hobby. Grading of chips is not as critical as grading coins are. In addition, there is a fear among many hobby veterans that this slabbing practice will result in overall higher prices of chips that have been slabbed vs. identical chips that have not been slabbed. These club members have overwhelmingly responded to an electronic pledge on the CC>CC message board, not to purchase slabbed chips, or patronize a dealer who is engaged in selling slabbed chips.
While I personally pledge that I will have no part of encouraging the purchasing, trading and/or selling of slabbed chips, every individual is free to make up their own minds as to what they feel is in their own best interests. I also personally support a proposed club policy that would prohibit the sale of slabbed chips during the club's annual convention and auction and/or accept ads from slabbing firms in the Club Magazine.
Can someone tell me why slabbing make sense? Currently, here's my take on slabbing.
Quoting Mr. James Taylor of ICG in his recent post on the ccgtcc.com message board…
"Notice I said we are offering a consumer protection service. ICG will not "change" any chip. "
What consumer protection? These disclaimer's are taken directly from their website at: http://www.icgcoin.com/terms.htm
8. The grading of coins is an exercise of professional judgment and opinion, which can be subjective and may change from time to time. As a result, ICG shall assume no liability of any kind whatsoever and makes no warranties or representations to Customer for any grade assigned by ICG to any coins.
10. Except as expressly set forth herein, ICG disclaims any and all warranties, express or implied, regarding ICG's grading service and all activities of ICG related thereto.
In another paragraph Mr. Taylor writes…
"Also please notice we are not being arrogant and saying, "You should collect slabs!", instead we are simply offering a consumer protection service to those who wish to use it."
I ask what protection?
They already have a disclaimer as noted above. Let's say you are a dealer and send in a very old chip and even you are not positive of the catalogue number as there are three varieties of this chip. Let's say ICG grades it and catalogues it but the catalogue number is incorrect (human error, grader error) and puts a catalogue number on it as the high-end chip worth $1000. The 2nd variety was worth about $200 and the third variety $50.
You sell the slabbed chip for $800 to a fairly new collector and he keeps it for several years then offers to sell it to another collector who is not so sure of it's catalogue number so the buyer takes it to a another well known collector dealer who believes it to be in reality the 3rd variety.
Who has liability in this issue? ICG will probably refer you to their disclaimers or may no longer be in the business of slabbing - excuse me grading chips anymore or may have gone out of business who knows what the future brings.
Next the chip is shown to several dealer/collector experts in the hobby and they all agree it is the 3rd variety. What now happens to the collector who relied on ICG's third-party expertise and purchased the chip from the dealer for $800?
Mr. Taylor states that the chips can be cracked out of their holder. I know this is done with coins, but coins being made of metals are not as fragile as chips. I've never cracked open a slab but I wonder how easy it is? Could it be done without damaging a chip?
Another problem is that ICG has refused thus far to publicly disclose who their third-party chip graders are. For all we know, it could be their normal coin graders. For all we know, it could be an unscrupulous collector or dealer who plans on grading their own chips at higher grades.
Are there really as many grades to a chip as ICG has on the grading list? I doubt it. Mr. Taylor makes a very strange statement, at least in my mind.
"The chips do not melt into the slab. Anyone is free to crack them out of our holders. The chips themselves are the only thing anyone will ever be buying or selling. We would never recommend someone buying a chip they are not educated enough to purchase. If someone relies solely on crutches of "dealer trust" and/or crutches of "grading service trust", they will end up with some bad purchases because of there own lack of education."
He says the buyer should be educated before purchasing, yet touts his service as a consumer protection? He further states that if they purchase on the "crutches" of a "grading service trust" they will end up with some bad purchases. I keep seeing that this is exactly what some people who want to use the grading services want is to have the "grading services" as the sole end all in what grade their chip is… and with putting catalogue numbers on them the sole end all "exactly" what chip variety it is.
"DEALER TRUST!!! I love this one especially if I am working with a Dealer who is also a club member. At least we have the club Code of Ethics and a club liaison member to arbitrate our problems.
I ask what then does a "consumer" expect to be getting from the purchase of a slabbed chip over the exact same one that is not slabbed?
"EDUCATED BUYER!!!" Isn't this what our club is all about? And I think most of us can agree that we don't need a chip in a slab telling us "this is what this chip IS".What does a slab have to offer for my chips and tokens?
Is it a grade that is accurate?
Is it a catalogue number (which they did not get permission from the author to use?) that is accurate?
Is it the protective holder?
My concern on using catalogue numbers on a slab is that I feel if the company is using someone else's creative works, they are implying those authors have endorsed such works or have authenticated the slabbed item is indeed the exact item as catalogued.
I just don't see where slabbing has a place in this hobby. The only reason for the slabbing companies to enter into our realm is to make money off the people, who they can convince that slabbing is the best way to protect a chip, GRADING and CATALOGUING aside.
Now here is my disclaimer…
If someone wants a chip/token in a hermetically sealed coffin, I don't care. It's their right to purchase whatever they want or to do whatever they want with their chips and tokens.
It is also my choice to proclaim…
I have often wondered why people in various hobbies want to "slab" (encase in a plastic holder) their coveted collectable. You can't hold it. You can't smell it. You can't play with it. In fact you can't do much with it at all. Yet individuals send their precious collectibles off to these third party authorities for certification as to grade, condition or what have you. Collectors actually pay hard earned dollars to have some stranger tell them how good their collectable is. I guess it is assumed this "stranger" has some mystical authority from some higher power that gives him the AUTHORITY to pass judgment. I learned early in life there is no such thing as an expert. There are just individuals who know a little more about a certain subject than you do. I also learned to look out for people who claim to be an expert, especially in the collectable field. Usually you can find other collectors who know more than the so called experts.
I have bounced from collectable to collectable since I was a kid. I have collected stamps, comics, marbles, baseball cards, coins, rocks and just about anything that comes to mind. You see I suffer from collectable -itis. I must collect in order to survive. Before collecting casino chips, matches etc. I collected coins. In fact I put myself through college restoring coins for a well known coin business (establishment) back in the 60's. I was so good I could remove the carbon spots from an Indian or lincoln cent and retone it back to its original color. I am sure many of you who still purchase coins have bought some of my restored cents. When "slabbing" of coins started I knew it was time for me to leave the coin hobby. As years passed every so often I would get a phone call from my previous coin employer asking if I would "restore" a lincoln or two for him so he could slab them and make more money. I would decline and after a few more years he quit calling.
He would tell me how this slabbing thing was the greatest since sliced bread. We could put grades opboa coins and a few AU that showed "cabinet wear" and make more money than if these pieces were unslabbed. After all he would tell me grading was subjective and an opinion. Therefore, his opinion was as good as any other individual in the coin business. If only I would use my talents and clean a few cents for him. Needless to say I quit coins all together. Sold what I had left and retreated from the hobby. It now was becoming a big business and no longer just a hobby for kids and young adults. I put way my Brown & Dunn grading book for posterity.
The collecting urge was driving me hard. I needed to collect something. By chance I stumbled upon casino chips. A friend introduced me to collecting limited edition chips. I jumped into it with both feet. After a while I learned their were more interesting chips to collect for me. Ones surrounded by history. Ones from closed and burned down casinos.
I loved it!!! I could mix my love of history with my collecting habit and enjoy the best of both worlds. What a hobby. I found others who shared my interests and soon I was joining the Casino Chips and Gaming Tokens Collectors Club (CC>CC).
Like with any hobby I would look for dealer shows to attend so I could search for the chips I needed for my collection. The last show I attended was a combination coin & stamp show held in early December, 2000 at the Tropicana Hotel & Casino in Las Vegas. As I was reviewing the various dealer layouts I stumbled across a dealer display that sent a shock up my spine and than down again. Here was a display of "slabbed" chips. All nicely arranged in a show case. None for sale but for display purposes only. I began to get a sick feeling in my stomach. What the heck was going on. I inquired about the display and was told that for a fee of $10.00 per chip I could have my chip graded by an expert, encased in plastic and returned to me with a certificate of authenticity. Now I was really getting sick.
I inquired, why would anyone want to use their service? I was told that it was the wave of the future just like coins. It was going to happen and maybe I should get in on the ground floor. I was told that the company had been slabbing coins for years and that chips were just a natural in the course of events.
Folks, I tell you I was very disheartened. I was looking upon what I believed to be the beginning of the end of the hobby I was starting to love. I thought why would anyone allow this to happen. I began to remember what I learned from the coin business. Collectors liked slabbed coins because slabbed coins eliminated the need for them to make a decision involving the buying or selling of the item. The decision was made for them by an "expert". The dealer liked slabbed coins because he could charge more for the item than if it was unslabbed. The dealer also had a built-in excuse. Someone else graded the coin therefore it was someone else's responsibility if there was a problem. Big bucks could change hands without anyone being held responsible except that distant un-named third party expert who graded and slabbed the coin long ago. What a perfect set of circumstances for those who love to blame others instead of taking responsibility for their own actions. Just think as long as I buy and sell slabbed coins I can always blame the third party grader/expert if any discrepancy should arise. A perfect hobby for those who don't accept responsibility for decisions and blame others for mistakes. Just like the rest of of that individuals life slabbing will give the built in excuse for anything that should go wrong in the hobby.
I was sick. Was this going to happen to my hobby of chip collecting? I am hoping not but lets be honest most individuals do not like to accept responsibility for their actions. We like to blame others for our mistakes. Slabbing of chips will make life easier. I buy it slabbed; I sell it slabbed. No hassles, no aggravation, no decisions other than do I have enough money for the purchase. Just what I always wanted - a nothing hobby!!! Yeah, Right!!! If you don't stop it . You asked for it.
Don't buy slabbed chips. Don't support the slabbing of chips. Speak out the hobby you save may be your own!!
Yesterday, I met with Russ Diaz at his home in Brigantine, NJ to settle up a transaction that took place at the Palace Station chip show in Las Vegas. Andy Hughes asked me if I had an A.C. Tropicana $25 4th of July hologram chip for sale. My reply was "Yes, but not here at the show with me." Andy asked how much I was getting for them, and I responded, "$35". Andy gave me the $35 with the assurance that I would send him the chip as soon as I returned to New Jersey. Well, Russ Diaz happened to have one of these chips for sale at his table at Palace Station. Russ and I being good chip friends and neighbors, and being that it was the last day of the show, I asked Russell if he would loan me his chip if he didn't sell it and that I would replace it when we got back to Jersey? Russell agreed, and I gave the chip to Andy that same day.
Yesterday, when I gave Russ the chip I owed him and he simply put in away in his box without looking at it, he commented.... "gee, I just realized that if there were a question of grades, this might not have been so simple." I concured,... with my comment to him; "You're absolutely correct Russ. Can you imagine if your chip had been slabbed with a grade of MS 62 or 63, you may not have accepted my chip if it had been slabbed graded MS 60 or 61."
Question: Is this what our wonderful hobby is about to be reduced to if slabbing ever takes hold?
Folks this is a battle for the soul of our hobby... and knowledge is power. Read the post so that we understand how we can fight this scurge. Quit the name calling and join the force. Let's take our hobby back for the greed-mongers who are "monitoring" our activities. Someone earoodr said that evil thrives when good people do nothing - we can't do nothing. We will not be made slaves to those who would lead us on paths that they choose. We are the club - each of us individually - who created and give life to this club and we wouldn't let it be infiltrated by those who see chips as just a commodity - to be bought and sold. In the name of Archie Black, its time we all joined the cry "Not in my hobby, not on our watch, NOT EVER!"
Slabbing is process which has become popular in coin collecting and several other hobbies. In this case I will talk about Casino Chips. Slabbing is the submission of a Casino Chip to a supposedly unbiased and qualified third party for examination and grading. The third party (The Slabber) grades the Casino Chip and then seals it in a plastic case marked with the grade. The idea is that although the Chip can be removed from the case it can not be returned to the case without there being evidence of tampering. Thus once the Slabber grades the Casino Chip, all others should be able to rely on his grade.
Slabbing is bad for the hobby of Chip Collecting for several reasons.
A. Slabbing removes collectors from being the judge of their chips. Much of
the allure of a casino chip is in its history. Many chip collectors need to be
able to touch the chip and the dirt and the grime that Gambler's of the Past
touched. Often times nicks and cigarette burns add a certain character to the
B. There is currently no universal standard grading system amongst Casino
Chip collectors. Therefore any claim by a slabber that a chip is of a certain
grade is inherently meaningless. Right now only one company is known to be
slabbing chips and they have not publicly stated their grading criteria.
Furthermore they appear to be treating Casino Chips as they treat coins and
penalize chips for having been cleaned. Cleaning a chip is not recognized by
Casino Chip collectors as having a negative impact on chips, in fact cleaning
chips is often done by a casino and is therefore part of the nature of chip
C. In other hobbies slabbing has lead to price inflation. This is because the
grades assigned by the slabber have a purported definiteness. Thus it is
universally accpeted that a coin of grade 64 must be more expensive than a lowly
chip graded 63. Thus slight variations in grade lead to great variations in
price. In addition the slabbing service is not free and dealers need to recoup
the cost of that service in their prices.
D. Because grading is a subjective procedure, the same chip may receive different grades at different times or by different graders. This leads to abuses where dealers or collectors not satisfied with the assigned grade, break the item from the slab and resubmit it until they receive a higher grade. Thus the dealer represents the chip as being graded by an objective scale, while taking advantage of the subjective application of the scale.
Charles Kaplan, R-2558
In the coin hobby, slabbing is very popular among dealers and collectors. Yet the concept of slabbing casino chips has been met with vehement opposition. Why is that?
Here is a brief explanation of slabbing, for those who are not familiar with the term. A coin is submitted to a company that provides a slabbing service. The coin is then individually reviewed by several experts who each render an opinion on the coin's authenticity and grade. A final grader assigns the grade based on the committee's opinions. The coin is then placed in a tamper-proof inert plastic container, which is also known as a slab. The intent is to guarantee that the coin inside the slab is genuine, original and in the condition indicated by the grade. While not all coin collectors and dealers like slabbed coins, slabbing does provide certain benefits:
Grading - there are several contending standards for grading coins; there is no universally accepted standard. Some dealers routinely over grade their coins to cheat their customers. As long as the dealers accept returns, this practice is OK with the ANA. The ANA is the American Numismatic Association, the equivalent of the CC>CC in the coin hobby. What sounds like a deplorable practice is tolerated because grading is subjective, it is an opinion, it is not the result of a scientific process. There has to be some leeway between the opinions of different individuals and this leaves room for the less honest dealers to take advantage of less knowledgeable collectors. There are so many different grades that can be assigned to coins, as many as 70, that you need to be an expert in order to accurately grade coins. Collectors are generally not expert enough to detect the minor differences that will determine the grade of a coin. Since you cannot always rely on dealers to grade accurately, having an independent organization grading coins makes sense, especially when a difference from one grade to the next could mean that the coin si sometimes worth $1,000 or even $10,000 or more.
Authentication - coin "doctors" can counterfeit or alter a coin to make it appear to be a rarer variety, year, mintage or a better grade. Counterfeit and altered coins are major problem in the coin hobby. In fact, the Numismatists, the monthly publication of the ANA, has (or use to have) an article in each issue listing newly discovered counterfeit coins. Experts at the grading services are able to detect counterfeits and alterations. Coins that are encapsulated are guaranteed by the grading services to be authentic. Coins cannot be cleaned without causing some damage to the coin, although its appearance to the naked eye may substantially improve. Cleaning a coin greatly reduces its value. Some coin "doctors" can clean a coin so expertly, that only an expert with the proper equipment can detect the cleaning. Most grading services will not encapsulate a cleaned coin.
Protection - coins are subject to deterioration from the elements. Once encapsulated in an inert container, a slab, a coin is no longer exposed to harmful chemicals in the atmosphere that can damage the surface of the coin. A slabbed coin is also protected from fingerprints and most other types of physical damage.
In the coin hobby grading, authentication and protection are very real needs to collectors. Slabbing allows a collector to buy a coin that is authentic, properly graded (within a limited range) and also comes with its own protection. I would say that virtually every coin collector has at one time or another owned an over graded, counterfeit, altered or cleaned coin without their knowing it. I know that I have, many times. If I still collected coins, I would not buy an expensive coin, which was not slabbed. The slabbing is a form of insurance. A new collector with limited knowledge of the hobby can confidently build a collection or rare coins, if they are slabbed. In the coin hobby, slabbing provides a service that was eagerly sought by collectors because of the abuses they suffered from disreputable dealers.
If slabbing is so beneficial to the coin hobby, why then do collectors oppose the slabbing of casino chips? Simply stated, the coin and chip collecting hobbies are difference. The biggest difference is that chip dealers are honest. In the hundreds or perhaps thousands of chip transactions I have been involved in, I have not felt that I have been taken advantage of even once. The only exception I would make is that sometimes a previously rare chip has been found in some quantity. There is a problem that some dealers are not forthcoming about the new discovery and continue to sell the once rare chips at what are now inflated prices.
Grading, authentication and protection are not anywhere as important to chip collectors are they are to coin collectors:
Grading: Chip grading is relatively simple. Although there is not a universally accepted grading standard for casino chips, one is not really needed because most of us accept the five levels of grades that are commonly used: new, slightly used, used, worn and damaged. The grades are intuitive and easily recognized, even by newcomers to the hobby. A grading service would not be of any value to the chip collecting hobby.
Authentication: I only know of one chip that was counterfeited, a $25 chip from the Fremont casino in Las Vegas. When this counterfeit was discovered, the dealer who was selling the chips (who was not the counterfeiter) did the right thing and offered refunds immediately. If counterfeiting becomes more of an issue in the future, collectors will need some way to better authenticate casino chips. Unlike coins, casino chips are made to take a lot of abuse and can be easily cleaned to remove dirt without damaging the chip. A casino chip that has been properly cleaned is likely to be more desirable to collectors and worth more than when it was dirty. Counterfeiting and alterations are not a problem for casino chip collectors and slabbing services will not provide any value to collectors in this area.
Protection: Casino chips, for the most part, are very sturdy and are not subject to any kind of decay from the elements. I have seen a few casino chips that have been discolored from exposure to sunlight or fluorescent light and collectors should take care to avoid this. Many collectors put their chips into some kind of holder, but do so as a way to store and show off their chips, not really as a way to protect them. One thing to think about, chip collections take up a lot of room now, casino chips in slabs will take up several times as much room. Chip collectors will not want to encase their chips in slabs as a means of protection.
Slabs allow viewing both sides of a chip or coin. In reality chips have a third side, the edge. On some chips, the edge may have valuable information for the collector. The easiest way for a collector to assess wear on a chip is by looking at and feeling edge. This is usually where wear occurs first in the form of small nicks. The edge markings, especially on newer chip designs from manufacturers like Chipco and Bud Jones are used in identifying chips. When in a slab, you will not be able to see or touch the edge of a chip.
There are other problems and abuses that occur with slabbing, which I will not go into in any detail. Suffice it to say that even if these abuses did not occur, there still would not be any need for slabbing chips for the reasons I've outlined above. As an example of one of the many abuses, the slabbing companies grade common, recently minted coins that are in excellent condition. In the coin hobby, a perfect coin has a grade of MS-70; near perfect would be MS-68 or MS-69. Common coins in these lofty grades are sold for outrageous amounts of money to less knowledgeable collectors. Can you image spending $50 for a quarter that was minted just last year that has a mintage of say one billion? Would you be willing to spend $50 for a Four Queens $1 chip that is current on the tables, but is fresh from the cage and slabbed? It sounds ridiculous and it is. If you cracked that quarter of the slab, do you know how much it would be worth? Exactly 25 cents. Slabbing has created an artificial market that is bound to crash at some point.
Slabbing has no place in the chip collecting hobby. We do not need slabbing for its intended purposes, grading, authentication and protection, and we certainly do not need the abuses that will come along with it.