Good Morning Terrence,

My name is not Gene but I will try to answer your questions.

1) The casino will normally show the chips outstanding as a liability on the books. They will claim eventually the chips will come back to the casino for redemption. The IRS will claim the chips will NEVER come back and the casino should pick up the entire amount in income.
The answer is that some of the chips will come back. Therefore, a negotiation generally takes place between the casino and the government. An amount is agreed upon usually by percentage of the total chips outstanding.

The analysis is done for each denomination. Obviously, the possibility of larger denominations coming back to the casino for redemption has a better arguement then smaller denominations.

2) Once the redemption date passes the casino must pick up in income the total amount outstanding that has not been redeemed.

I hope this answers your questions and takes my friend off the hook .

Jim