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