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He has to play the chips that were on the table when the hand started.

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Yes, which is why the dealer is unacceptably negligent here.

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Little harsh on the dealer aren't we?

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I didn't mean for it to be harsh, just straightforward. I just meant that the dealer should be on top of this. There are worse things dealers can do, but it's important to keep the cash on the table. I don't think the dealer should be fired or anything.