First of all, welcome to strike collecting. This is a fun hobby and a great group of folks.

Historically, red (or blue or pink or yellow) caps have been used for more limited production "chaser" strikes. These strikes are harder to win, because the casino only loads the machine with a small number of these colored capsules relative to the strikes in clear capsules. In addition, they are often limited to a run of 250, 500 or 777, sometimes higher. In general, at 500 or less, supply and demand are out of balance, and the collector value rises even if the fill ratio for the colored caps is decent.

Different casinos have different policies regarding the number of chasers relative to clears loaded into the machine. I think I once saw it as low as 1:5, but more typically it is 1:10 or 1:20 or so. In the old style machines, it was not uncommon to put one or two for every hopper fill (about 50 strikes total, I think). The relative scarcity of the chasers forces people to put a lot more money in the machine on average to win one, and in the process, they win many duplicates of the clears.

When those clears are relatively new issues (like the Plaza, LVC, El Cortez at convention time), one can hopefully trade or sell the dups, and that helps keep the value of the red caps reasonable (maybe $20-40 or 2-3x the clears), assuming a sufficient number were minted in the first place to meet demand.

But when the clears are ones that have been around for a long time (like at the Four Queens all the time now, or SAF at convention time), they (the clears) command little or no premium over face at auction or for trading. Many collectors just end up cashing in the clears at the cage. This makes the acquisition cost of the red cap very high. You will thus see them selling at auction for a relatively high price -- initially around $80-90 and then usually dropping to $50-55 (still 5x the FQ clears at their face value) over time.

During convention at the Palms, the clears were old strikes, but they mixed more red caps in with the clears, helping to keep the resale prices down a bit ($22-25). Still, many folks like me found them really hard to win, spending net $65 to win just one! At that point, it's better to just go buy it from a dealer or another collector who can average out the acquisition cost over lots of red caps.

More recently, some casinos have used red caps for obsolete strikes. In concept, these are chasers because they are harder to win...but those obsolete strikes are many times common strikes which are in abundant supply -- and therefore not worth "chasing." This has been a definite turn-off for many who thought they would be getting something more valuable.

Maybe more than you wanted to know....

--Norm