Jason,

The process of slabbing a chipinvolves sending the chip to a third party grading service. The chip is then graded and encapsulated in a slab. The slab is marked with the assigned grade.

Of course grading a casino chip at this point is meaningless since there is no universally accepted grading system for chips. In fact the one company which is trying to slab chips refuses to tell us the details of their grading system.

slabbing is common in coin collecting where minute differences in grade can produce large differences in value, this has led to grading and slabbing abuses in that hobby.