I have used a 1/8th or 3/16th drill with a drill press. (not necessary) Drill slow! If you don't the back will pop out or shatter. Yes, the backing wood is a support so the plastic won't chip.

I made set of 100 for home play, after some were stolen from the local saloon where we used them. I figured the ones with holes would be less attractive to whoever (not one of the players) had liberated the first set.