Why isn&#39;t a casino forced to return funds lost by an embezzler?
<p>If person A steals something, say a bicycle, and sells it to me (I have no knowledge that the bicycle was stolen) the law says I must return the bike to its rightful owner without any compensation - except that I can pursue legal action against the person that sold me the bike.</p>
<p>If this is true, why is not a casino forced to return gambling losses (winnings from the casino's perspective) from a person that used embezzled funds to gamble with? (for instance, see <a href="https://www.cnn.com/2022/02/08/us/nun-school-embezzlement-gambling-prison/index.html" rel="nofollow noreferrer">this</a> recent article)</p>
<p>Question 1: Is my assumption correct?
Question 2: What is the difference between these two scenarios?</p>

<h2>Because casinos don’t accept bicycles</h2>
<p><strong>They insist on cash</strong></p>
<p>With normal property, a possessor can never pass on better title than they have. Since the thief never owned the bicycle, you don’t own the bicycle.</p>
<p>Cash (which includes electronic cash) is a negotiable instrument and different rules apply. A holder in good faith of a negotiable instrument owns it. So if a thief stole cash, they don’t own it but when they spend that cash (at a casino or otherwise) the seller <em>does</em> own it. The previous owner can pursue the thief for their loss but not a person who received the cash in good faith (i.e. without knowing it was stolen).</p>
<p>The reason for this distinction in the law is to provide certainty. If you can’t trust the money (and other things like bearer bonds) the system collapses.</p>

united-states property theft currency