This topic has been the topic of numerous posts on Gaming bulletin boards. The value to the player is as I stated. I would be very happy to buy a few thousand in casino promo chips (good till lost) at 50% of face. I might even play at Palms for this kind of deal [g].

You are right, of course, that the reason the casino gives them away is to encourage (much) more live-chip play by the recipient. My guess is that accounting charges the other 50% to a marketing "player development" account, just as they do with free slot play, comped meals, hotel room cost, etc.