A Tipping Point

I inadvertently set off a minor controversy last night when I passed along to @Pokerati that I had learned from a Red Rock Casino poker dealer than current Heartland Poker Champ @veerob (Rob Perelman) didn’t leave a dealer tip at the conclusion of the tournament last Sunday.

First, I do not know Rob at all, and was not making an accusation against him. I knew @Pokerati had been covering the tournament. Secondly, as with any tournament cash of any size Rob is free to spend or not spend his money any way he pleases. (It should be noted that Rob followed later Wednesday with a tweet that he tipped $2,000 tip 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.).

I sent this tweet to @Pokerati for one reason – tipping is an aspect of poker that I feel is rarely discussed. Certainly, there is no standard for tipping in tournaments or cash games.

Mike Caro makes a number of salient points when it comes to tipping in both cash games and tournaments in his article: http://www.poker1.com/archives/8645. How one player tips in poker is probably no different than how same player tips at a restaurant or when getting a haircut.

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 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 Gaming Industry Tip Compliance Agreement 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 per your rate of pay (i.e. minimum wage). If you are “dead spreading” at 8 AM at Excalibur on a Monday morning 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 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.

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 thru 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 thru five are happy they cashed, but upset they didn’t cash big. They generally tip lowly 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 tip based on what they think is fair – from one 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 ($3,000-$120), they 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 and tipped $7,000 on his $79,059 cash. A 2-4 limit player has to be 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 bead and tip accordingly. Again, this tip from last Sunday is unconfirmed.

Every poker dealer has heard the tipping horror stories. My friend and fellow dealer @scarletlv told me a story 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 in a tourney more than $2,000. But he was so angry about the bad beat he took that knocked him out of the tournament 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 that are dealers in Las Vegas and 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.

SALARY                        AVERAGE PER HOUR

$100,000/yr.                      $48

$75,000/yr.                        $36

$50,000/yr.                        $24

$40,000/yr.                        $19

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

Locals and low-levels players are typically great tippers. They make sure they push you $1.00 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 a high-stakes game on The Strip.

In the end, poker dealers are no different that 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 and part-time poker player based out of Henderson, NV. You can follow him on Twitter under @chadharberts.

2 Comments

  1. Rez Poker

    January 21, 2011 at 11:13 PM

    I *always* tip!

  2. Paul Sobel

    April 1, 2011 at 12:10 AM

    Great article Chad. I try to say I am a poker player and I take care of the dealers every time. Even when chopping a tournament, I work the tip into the chop so the other players can not stiff the dealers.

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