Erotic tokens are just a subset of “good for” token. These chits substituted for currency. In many boom towns on the frontier actual coinage was in short supply.  Hence, merchants would use issue tokens good for trade in their store.  These also served as coupons and advertising.   Also, use of privately issued coinage would enable the merchant to minimize or even evade paying taxes.  Brothels have always been a good place to launder money for services and avoid the taxman.  The IRS actually operated a brothel that it took from Joe Conforte for tax evasion, once in the 1980s and once in the 1990s.  Tokens tell a fascinating tale of mercantilism.

I have one brothel token and have seen many more.  Eventually the brothels disappeared from most towns (expect in Nevada) and the tokens lived on through use in the peep show machines of the early 1900s, and later, the adult bookstores.   Beginning in the early 1980's the bookstores began replacing machines that accepted tokens with machines that only accepted dollar bills.  Hence, the use of erotic tokens has stopped, by and large, and are therefore no longer being produced and have become obsolete.  

UPDATE: Now that our curiosity was piqued, in May 2008 we went to some of the adult emporiums, bookstores, and theatres in the City of San Francisco (only to look inside the cash register, or course).  There were only two stores left in the city that still use tokens (all the rest have gone to paper money or credit cards).  And these stores will only use tokens for another two months until they switch over to the more modern machines.  Therefore, the era of erotic tokens has ended.  Even among the common modern tokens, their demise in nigh.  We've learned quite a bit about the use, scarcity factor and number of erotic tokens over the past couple years and are happy to share this information here at CoinMine.  We haven't found this information published anywhere else.  Here is the census of the designs we observed in the cash register at the two stores still using the tokens as commerce:

Say, why not buy a set of erotic tokens from CoinMine, making them your own and starting a new collection that should be good for a few jokes around the thanksgiving table. 

More on Tax Tokens:

Nowadays most folks don't give a second thought to paying taxes on purchases since the tax is charged at the same time and is just 'the cost of doing business'.  It wasn't always that way, however.  Currently the federal and state governments force merchant to charge a percentage of the transaction as a sales tax directly into the transactions, in dollar amounts.  Previously is the state wasn't authorized (by the people) to do such, and they would charge a 'token' tax, representing both the type of transaction type - as a physical token - and the supposed pittance of the tax (which originally started as a nominally small amount such as on-half of one percent but - like most other taxes have grown enormously - and in most states now are between 4-7.5%).  This fixed state (and city) tax was conducted as a transaction, separate from the sale.  That is, the merchant would charge you a dollar for a box of nails, and then separately charge a token for the tax. 

Some 'vice' consumer goods, such as tobacco and liquor had their own special type of tax - the revenue tax which was actually a type of stamp affixed to the package container showing that the goods dealer did indeed give the state a cut of the  action. Of course, as is currently done the tax is built into the transaction in hopes the consumer will not even notice the ever-creeping tax rate. 

This is similar to how the feds charge an income tax. For many decades, when the citizenry was strong, they would not even allow the central government to charge a tax on wages.  The first few feeble attempts by the corrupt senators was roundly and soundly defeated by the (at the time) relatively honest supreme court. Of course over time the corrupt power brokers sacked the honest court judges and eventually we ended up (through a combination of avarice and apathy) a corrupt judicial branch willing to enforce the wage levy.  However, notice that today the income/wage tax is taken right off the top. The government requires your employer to set aside their cut before you even see it in your paycheck. They make sure they get paid first. Should they try to pry the money from your hands or bank account twice a month they realize that would set the people in a bitter mood, so it is: "Out of sight, out of mind".

Many counties/townships/etc use the term mil levy to refer to their property taxes. A 'mil' is 1/1000 of a dollar, or 1/10th of a cent. (Now you know where the term 'good for 1/10 cent' comes from as seen on your typical coupon for consumer goods).   Sales tax tokens were used from the 1920's until the1940's to collect tax that was equal to or less than 1 cent.  Some cities and counties independently issued tax tokens in addition to, or instead of, the state tax.  Also, the states would occasionally issues these tax tokens to support particular funds in lieu of bonds such as 'old age' funds, emergency relief funds, luxury tax, and widows and orphans funds.  Issuing these tokens proved a valuable way - before the age of computers - to keep track of where sales taxes should be distributed, the matter was as simple as collecting the tax tokens form vendors and distributing tax funds accordingly.   They were only used in about eleven states. California and West Virginia tax tokens are very scarce; we have the other states listed in our inventory.