San Jose Casino Worker Arrested for Embezzling Chips with Husband

_{Police say hundreds of thousands in chips were stolen from Casino M8trix in San Jose by an employee and her husband. (Image: John Crowe / Alamy)}

San Jose police announced Wednesday that they had arrested a couple they say had managed to embezzle hundreds of thousands of dollars worth of chips from Casino M8trix, a cardroom casino destination in the city.

Police say that they arrested 38-year-old Ellen Mangundayao on May 30 after receiving a call reporting that she had been pocketing chips from the cardroom.

Investigators Say Scheme Operated for Several Years

According to officers, the investigation revealed that Mangundayao had been taking chips from the casino between May 1 and May 22. She would allegedly then give those chips to her husband, 41-year-old Mark Mangundayao, who would then cash them out.

Police say they then searched two homes associated with the couple, where they found nearly $10,000 in casino chips and around $75,000 in cash. Detectives suspect that the couple may have embezzled hundreds of thousands of dollars over the course of multiple years.

Officers booked the Mangundayao couple on suspicion of felony embezzlement and conspiracy. They have since been formally charged and remain in custody at the Santa Clara County jail.

Ellen Mangundayao had reportedly been working at the casino as a “third-party proposition player.” These players are employed by outside firms to work in California’s commercial cardrooms in order to take the dealer position in table games that rotate the option to bank. Typical players rarely offer to take this position, instead leaving it to third-party proposition players (TPPs), who work for licensed businesses and must wear badges making their role clear.

Cardroom Prop Players Under Fire from Tribal Casinos

That arrangement is necessary because California tribes have the exclusive right to offer banked card games there. That has made games backed by third-party players a controversial subject in the state’s gaming industry, with seven major tribes suing cardrooms early in 2025 over the issue. 

While the tribes had argued against the banked games for years, they weren’t able to take legal action until California Gov. Gavin Newsom signed the Tribal Nations Access to Justice Act in September 2024.

“Although use of TPPs is not per se illegal under California law, when combined with the card rooms’ refusal and failure to rotate the bank from player to player, the TPP becomes a de facto house bank,” the lawsuit states.

In May, California Attorney General Rob Bonta proposed new regulations for cardrooms to respond to these complaints. In particular, his new rules would require the player-dealer position to rotate every 40 minutes and only allow players to wager against a TPP when they were in the player-dealer position. 

The proposal would also restrict blackjack games, allowing them at cardrooms only if they use rules that don’t include a “bust” feature and have a target point count of 21.

The proposed rules were blasted by cardroom supporters.

“Our cardrooms are a major component of our local economy, offering regulated games that have been legal for decades,” California Assemblyman David Tangipa (R-Clovis) said in a statement. 

“The Attorney General’s proposed regulations pose a direct threat to these good-paying jobs and would devastate our economy by eliminating critical tax revenue.”