European Gaming Lawyer magazine Autumn 2016 | Page 31
table games, and sometimes the other
casino floor staff, for one reason – to
receive better treatment while gambling.
In most casinos, tips given to dealers
are pooled in the interest of fairness and
integrity. To make sure that no customer
is given an advantage, or even perceived
by other patrons of the casino as having
an advantage, the tips are pooled so that
all dealers take home equal shares and
there is no perception of bias favoring
any one player over another. Tip-pooling
occurs when employees who are regularly
tipped put all the tips received within
a certain time frame together to be
divided up evenly by the employer. This
compilation of tips, or tip-pool, must then
be distributed by the employer according
to the mutually agreed upon terms of the
pooling arrangement2.
Overall, tip-pooling is a legal practice
deeply enshrined in the United States of
America and even in Europe.
Discussion - Tip-pooling should be
legally qualified as a trust3
In our view tip-pooling should be legally
qualified as a trust. But why?
As outlined above, the employees rely
heavily on the employers to divide the
money collected in the tip-pooling between
all those employers entitled according to
their respective shares.
Hence, in order to reflect the trust given
by the employees, the employers ought to be
considered as holding the tips in trust.
Traditionally, the trust has an internal
tripartite structure: 1) setlor, 2) trustee;
3) beneficiaries. In general terms the setlor
(gamblers) is the original owner of the
right of ownership of the goods (tips) to
constitute in trust; the trustees (casinos),
are the present depositary of the constituted
goods in trust (the money in the tippooling); and the casino table dealers are
the last beneficiaries of the goods and of the
rights that are associated to it.
For that reason, the trustees are legally
prohibited from taking any benefits from
the position (of mere depositary), unless
duly authorized.
Thus, the trustees should maintain the
goods (tips) in trust – that obligation is
actually a manifestation of the duty of
loyalty, that is deeply ingrained in the legal
status of the trustee4.
The no profit rule, which is a fundamental
aspect of the English law of trusts, forbids any
sort of conflict between the interests of the
beneficiary and the interests of the trustee.
Furthermore, the no profit rule prevents
those trustees from getting profits or
income through the fiduciary position
that they occupy, unless provided for in
pooling arrangement or duly authorized
by the beneficiaries5.
Conclusion
Tipping is now so ingrained in the culture
of United States and in the gaming industry
as a whole that it will not cease to be a
part of service industries anytime in the
foreseeable future6.
For this very reason, the specific
regulation of the tip-pooling in the United
States poses a considerable challenge to the
casino industry as a whole.
For the sake of the integrity of the gaming
industry as a whole, such a challenge should
be embraced.
2 In this sense, KEVIN BLACKWOOD, Casino Gambling for Dummies, 76, (2006), pp. 76-78, whose research we have followed very
closely in this paragraph; apud, KANDIS McCLURE, “Tip-Pooling at Nevada Casinos”, id., pp.81-82.
3 For reference, we will closely follow what we have written in, HUGO LUZ DOS SANTOS, “Tip-Pooling in the Casinos of the Special
Administrative Region of Macau (Show me the Money)?, in: Gaming Law Review and Economics (GLRE), being published.
Hugo Luz dos Santos is a Legal
Consultant. He has written several
doctrinal articles regarding the
Gaming in Macau, United States
of America, United Kingdom, and
Canada, addressing specifically
(candent) issues, such as “Walking”,
“Side-Betting”, “Outstanding Chips”,
“Surveillance and Privacy”, “TipPooling”, “Daily Fantasy Sports”,
and “Responsible Gambling”. He
has published several scientific
articles concerning the money
laundering crime in Macau, SAR
and Portugal, where he is currently
working. He is the author of the
book “The Gaming Legal Framework
in Macau, SAR: an overview”,
recently published in Germany and
distributed worlwide.
His scientific research
encompasses all legal branches,
as far as Macau Legal Framework
is concerned.
4 For that reason the jurisprudence of English courts emphasized “the “no conflict rule” and “no profit rule” to which fiduciaries such
as directors are subject”; O Donnel v Shanahan (2008) EWHC 1973 (Ch), (RIMER LJ) (37).
5 The principle no conflict rule, in opposition to no profit rule, is today set out into Companies Act 2006 (CA 2006), in the section 175
(1) which reads: “A director of a company must avoid a situation in which he has, or can have, a direct or indirect interest that conflicts,
He can be reached at:
[email protected]
or possibly may conflict, with the interests of the company”; about the Companies Act 2006 and the fiduciary duties of the direct