Many years ago (1992 - 1994) I played frequently at Casino Chico in Chico, CA. They spread 1-3, 1-5 seven card stud, 1-3 3-6 Holdem, and pot limit Omaha 9 (the nine was to entice more gamblers into the game for the frequent lows).

The owners of the club used their own $1, $5, $25, and $100 chips. They also had a single rack of $5 Casino de Isthmus City chips that was used occasionally for $500 chips when the owners played. I remember one night where one of the owners lost a hand and threw the full rack of $5(00)chips at the dealer. The other owner made a quick ruling that any $5(00)chips that were in the pot would be returned to the other owner, but any that hit another players stack were considered as being "won" by that player. I don't remember any thrown racks after that.

Due to the limited number of $5 Isthmus City chips at their casino (100 all in new condition), the infrequency of use, and that all of the players were known to the owners, they were not concerned with having an extra chip hit the cage.

That's the only use of generic paulsons that I can confirm without an modification such as an over stamp like the topless club chips from Reno.

John