A Tipping Point

Chad Harberts

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OP-ED

I recently set off a minor controversy when I mentioned to @Pokerati that a Red Rock Casino poker dealer complained that new Heartland Poker champion Rob Perelman (@veerob) didn’t leave a dealer tip at the conclusion of the tournament.

First, I do not know Rob at all and was not making an accusation against him. I merely passed along the information because I knew @Pokerati had been covering the tournament. Second, as with any tournament cash of any size, Rob is free to spend or not spend his money any way he pleases. (He later tweeted that he tipped $2,000 on his $158,755 cash. The confusion being that he left the tip the next day after most of the dealers were gone and not directly after the tournament.)

Still, I believe the practice of tipping is an aspect of poker that merits discussion. Certainly, there is no standard for tipping in cash games or tournaments, and a lot is left to chance when the casino and other players alike rely on winners to pick up the check.

You may not agree with me to tip 10% of winnings of more than $10,000 in a poker tournament, but you can certainly agree that .00025% is extremely low!

Mike Caro makes a number of salient points when it comes to tipping in both cash games and tournaments in his article from 2006 here. How one player tips in poker is probably no different than how the same player tips at a restaurant or when getting a haircut.

Some players think that the part of a poker tournament buy-in withheld from the prize pool should cover everything. I have heard that of the house cut for the HPT main event (a $1000+100 tournament), $50 went to Red Rock Casino and $50 to the Heartland Poker Tour. I find it a little incredulous that a Las Vegas casino would split the house cut 50/50, but it’s possible.

When you think about the house cut, it is much like getting a meal in a restaurant. If you pay $50 for a nice meal it’s not because the food you ate cost $50. That $50 covers food costs, the server, the cook, the utilities and rent and leaves a profit for the restaurant owner. The server gets paid whether you leave a tip or not. The difference is that if you don’t leave a tip, that person is making $2.13 an hour. If you leave a tip of 15% to 20%, that same server can make a living wage.

Some players think that house cut is a huge profit center for the casinos. That house cut does afford some profit for the casinos, but that money has to pay a lot of people. At the WSOP, the house cut has to cover the labor costs for hundreds of dealers, floor people, servers and tournament staff.

At smaller casinos, where a tournament can literally use up every available table and dealer, this house cut is what the casino earns off its tables since there is no rake during a tournament. I manage a 40-person tournament in a four-table poker room. The tournament typically takes three hours. Until the tournament gets down to 30 people or less, every table is full and there is no place to host a cash game. The house cut makes up a percentage of what is lost in cash-game rake. This obviously doesn’t apply in a bigger casino that can afford to have a separate tournament room from its regular poker room.

As a poker dealer, I have been asked about tipping and how poker dealers are paid. Most poker dealers sign up for the Internal Revenue Service tip compliance program through their home casino or in any casino in which they are dealing a tournament. The formal part of tip compliance is: Under the Gaming Industry Tip Compliance Agreement Program (GITCA), a gaming industry employer and the Internal Revenue Service work together to reach a GITCA that establishes minimum tip rates for tipped employees in specified occupational categories, prescribes a threshold level of participation by the employer’s employees, and reduces compliance burdens for the employer and enforcement burdens for the Service.

Essentially, poker dealers (and other casino employees) are taxed a certain amount per hour for every hour they work. The rate of tip compliance is higher in bigger and busier poker rooms, less in smaller and less frequented rooms. What is consistent is if you are working eight straight hours at Aria on a Saturday night, you are taxed a certain amount per hour your rate of pay (i.e. minimum wage). If you are “dead spreading” at Excalibur at 8 AM on a Monday and don’t get a game for the first two hours, you are still taxed at your tip compliance rate.

The upside is that poker dealers in the tip compliance program keep all of their own tips. They are not reported to the IRS. They are not taxed. They are not shared. These tips are what make up the majority of a poker dealer’s wages. For a full-time Las Vegas poker dealer you can expect that your bi-weekly paycheck, after taxes and insurance, won’t buy you more than a bag or two of groceries. Your tips, however, can afford you a car and a home.

I know many a dealer who would rather be pitching cards in a four-table casino in the suburbs than in a high-stakes game on the Strip.

As I have been on the felt as both a tournament casher and a tournament dealer, I have seen both sides of this dance.

In a typical situation where the top 20 players of a tournament are getting paid, the tipping breakdown generally goes like this – 16 through 20 make a very small profit but they are willing to throw a few bucks of their profit to the dealers because they are happy to have survived the bubble. Finishers 15 through 5 are happy they cashed, but upset they didn’t cash big. They generally tip small or not at all because they have the mentality that tipping the dealers is the top finishers\’ problem, not theirs. This is not true for all players, but I see it happen more often than not.

The top cashing players usually all tip based on what they think is fair – from 1 percent to 10 percent, but usually in the 3-5 percent range.

Here is where human nature really kicks in. If I buy in to a $120 tournament and win $3,000, I think I generous tip is in order. I would tip $300. However, most players I have run across do not think about the $2,880 profit they just made, but instead, think about the $300 they are about to give away. And that seems like a lot of money.

The same source of the @veerob tip told me that the second-place finisher was a local Red Rock 2-4 limit grinder who tipped $7,000 on his $79,059 cash. A 2-4 limit player is lucky to make enough just to stay ahead of the rake. Generally, that player would look at a $79,000 cash like hitting the bad beat and tip accordingly. Again, this tip is unconfirmed.

Every poker dealer has heard the tipping horror stories. My friend and fellow dealer @scarletlv told me of a player who tipped a half eaten candy bar. I have dealt in a casino where quarters are raked and players would tip 25 cents on a $45 pot. At a major downtown casino last summer, a player profited more than $2,000 in a tourney, but was so angry about the bad beat that knocked him out of the tournament that he slapped two quarters on the counter for the dealers and stormed out of the room. You may not agree with me to tip 10% of winnings of more than $10,000 in a poker tournament, but you can certainly agree that .00025% is extremely low!

I have dealt a number of poker tournaments in various casinos and have many friends who are dealers in Las Vegas and in other places. No matter the size of the tournament, the number of entrants or the location, the same number comes up time and time again with poker dealers — $10 per down. That is what most tournament downs (30 minute dealing sessions) average. That means that most poker dealers make $20 per hour for dealing a poker tournament (before taxes). That may seem like a lot of money, and certainly it is above the poverty line, but look at it this way:

And that’s for full-time dealers. With the supply of dealers being vastly higher than the current demand, most dealers are not full-time employees. They are extra board personnel and temp hires who take jobs where they can get them.

Locals and low-limit players are typically great tippers. They make sure they push you $1 or more after every single hand they win. Generally, bigger game players and tourists are terrible tippers. I know many a dealer who would rather be pitching cards in a four-table casino in the suburbs than in a high-stakes game on the Strip.

In the end, poker dealers are no different than servers, bartenders, valets and a whole litany of service industry jobs in Las Vegas. We do what we do because we like it and it affords us a living.

But the next time you hit that beautiful river card and take in a huge pot, take a beat and think about the hard-working person in the box making the game go smoothly.

Chad Harberts is a full-time poker dealer/supervisor at the Club Fortune Casino in Henderson, NV, and co-founder of WastedAcesPoker.com. You can follow him on Twitter under @chadharberts.