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Old Poker Chip Company Inventing New Money

November 15, 1987

PORTLAND, Maine (AP) _ The makers of some of the first poker chips produced in America have been toiling away for nearly 100 years, virtually unnoticed, in a 19th century manufacturing plant tucked away on the outskirts of this coastal city.

But now, the owner of the Burt Co. is hoping a new design that uses computer technology will revolutionize the clay, American-style gaming chip and thrust his firm into the forefront of this small field.

″Nothing will be done the same way it has been done. Nothing,″ promised John Kendall, whose firm is one of only three companies in the world to produce poker chips for casinos, card houses and private gaming groups.

Since Alonzo Burt opened shop in 1895 to make pool balls of clay and shellac - and 20 years later began stamping out the flat, round, clay poker chips - the process has remained virtually unchanged at the Burt Co., Kendall said.

Texas clay is still mixed with shellac and dyes, melted and pressed out into a thin sheet, while compressed molders cut out the chips. Workers then meticulously carve away squares along the edges of the beige chips and insert colored clay pieces to distinguish each casino’s chips.

The chips are readied for casinos in the ″money room,″ where laminated inlays marked with dollar amounts and clients’ names are stamped onto the centers.

″The chips had never changed, ever. You’re talking 90 years here. People had no reason to throw out last year’s model,″ said Kendall, who bought the company in 1985 from Burt’s grandson.

Kendall, 38, said in a recent interview that he has a formula to change all that with a customized chip that he says is difficult to counterfeit.

Game operators and officers who investigate counterfeiting in the nation’s casinos say although internal security practices have made counterfeiting a rarity, fake chips are cashed in.

Counterfeiting is ″a problem of high concern to casino regulators and operators. But I would like to say that it’s not that easy,″ said Fredric Gushin, assistant director of the New Jersey Division of Gaming Enforcement.

″As in any other type of crime, the criminals get more sophisticated on occasion. It depends in a large measure on the diligence of the games personnel,″ added Gushin, who said figures were unavailable on how much money is lost each year to counterfeiting in New Jersey.

Kendall’s new technology employs the use of bar codes, which are stamped along the 1/8 -inch sides of the chips. Using a bar code scanner available through the Burt Co., a casino cashier could verify that a chip’s bar code is the same as the casino’s.

The scanner also can feed the information into a computer to keep a running tab of the casino’s cash position immediately after each transaction.

″Casinos lose thousands of dollars to people using counterfeit chips because, right now, the chips are changed into money first and then checked and counted,″ Kendall said. ″With this new method, the chips can be validated, sorted and counted in one move.″

Kendall said he also plans to manufacture chips containing markings that can only be detected with the aid of ultraviolet lights, infrared lenses placed in cameras above the casino floor, or bar code scanners, making it easier to detect counterfeit chips.

″The new methods will allow casinos to passively observe chips in play on the casino floor,″ Kendall said. ″They won’t have to touch a chip to check it.″

The idea of high-tech chips drew a mixed response from the operators of casinos, which use tens of thousands of chips a year.

Lee Skelley, games manager at the Las Vegas (Nev.) Hilton, said counterfeiting has been rare in his experience, but ″it’s something to be guarded against.″

″Right now, at the end of each shift we count all the money in the racks of each game. It’s counted manually be two people. Bar coding and scanners would probably speed up that process,″ Skelley said. ″I wouldn’t mind trying a prototype.″

But Tom Sutton, a casino shift manager at Bally’s in Las Vegas said current practices seem to provide adequate protection against counterfeiting.

″Chips are very hard to duplicate right now,″ Sutton said. ″I just can’t see that we need a system like this at this point.″

The cost of the new chips and related equipment will not be high, Kendall said. The high-tech chips will run about 70 cents each - the price of current chips - and a bar code scanner will cost up to $3,000.

″One casino that I know of lost $110,000 in a weekend″ from counterfeiting, Kendall said. ″They could have bought a lot of scanners with that kind of money.″

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