Casino Enterprise Management

When March 13 rolled around this year, what were you doing? Were you preparing to wear green and toast the Irish? Or were you visiting each game on your floor to make sure the new $5 bill was accepted by each and every bill validator?

For many, the introduction and inchworm rollout of server-based games creates mammoth tasks like this one. Casinos, manufacturers and regulators alike are eking through myriad steps in order to evolve from a physical check of every machine to a more centralized method of operating, monitoring and controlling the slot floor. Server-based and downloadable games have been top of mind since they were introduced as a concept more than three years ago. Now the reality, or lack of a large installed base, is a main topic of discussion as transitions are slowly made to embrace these new technologies.

Gaming regulators from 80 of the 400 jurisdictions worldwide recently came together for the 7th Annual Regulators Roundtable hosted by Gaming Laboratories International (GLI). James Maida, president and co-founder of GLI, describes the gathering as a means for regulators to prepare themselves for new and evolving technologies in a safe environment. Through a two-day series of presentations and forums, regulators had the chance to learn about changes that affect their decision-making and discuss with their peers the fine points of addressing these changes.

Held Feb. 6–8 at the Tuscany Suites & Casino in Las Vegas, the first day of the conference focused solely on server-based gaming. During a luncheon presentation, Bally Technologies Senior VP of Strategy & Business Development Bruce Rowe best described the capability of a networked floor as “the ability to dynamically and bi-directionally interrogate, configure and move software or data to and from a digital gaming device.” Digital gaming devices are those that use digital infrastructure to deliver message content, communications and security.

The Benefits
The benefits of server-based gaming have been touted for years, as the anticipation for streamlined slot operations builds.

Inventory polling and interrogation in a server-based gaming environment allows the operator to assess from a central server what currently exists on the casino slot floor.

From a regulatory standpoint, one can query the network to immediately poll the licensing and certification status of a machine or batch of machines, a process which can take months if done by hand in a large operation with 500 slots or more. Currently, operators may not know whether all of the games on their floor are valid and approved or whether a chip has expired. A simple question of what peripherals (e.g., bill validators, TITO components) are installed and what versions of software are running the components can be assessed with one simple query.

In a server-based environment, downtime can be addressed swiftly. When a printer jams, a light bulb goes out or a hopper is full, notice is sent to a central switchboard, alerting personnel to the issue on the floor. Technicians can be sent immediately to resolve the issue and get the machine back up and running.

Within this new environment, manufacturers look to provide dynamic gaming configuration with the means to deliver the right game to the right customer at the right time. As the weekend draws near or a big event fills the casino floor, operators would benefit from “yielding” their casino product. Like hotels that change the prices of their rooms during peak periods of demand, a premium could be charged for gaming. According to Rowe, with better revenue management, “No one should be playing a single penny on a penny game on New Year’s.” Modular configuration allows the operator to adjust the game, the denominations available, the bet configuration and the sound levels from a central location.
However, Rowe continues, “It’s not a question of can it be done, but whether should it be done, and we will learn along the way what makes sense.” The level of transparency to the customer affects the perceived value proposition. It’s up to manufacturers, regulators and operators to determine the amount of downtime needed to make a change on a machine to quell any perception that a player’s chance to win is in flux.

The way security is maintained and enacted changes in a server-based environment. Security is centralized, allowing for the forensic investigation of a slot machine from a remote location. Jackpots can be validated, interruption in gaming operations can be analyzed, and tampering can be monitored without cordoning off the slot machine and physically unlocking its contents. Real-time reporting capabilities with bi-directional communications from a network of slot machines also offer better opportunities for improved reporting and analysis.

The utility of these benefits depends on the availability of these features as approved by the governing gaming jurisdiction.

The Requirements
The advances in technology that allow for expanded storage of data and the ability to increase the bandwidth and capacity of a connection between digital devices has far outpaced the gaming industry’s ability to realize the gains from information networks. In order to centralize the operation of a slot floor to that of a single server requires the installation of heartier cables that can support the greater bandwidth to shuttle data back and forth. The network infrastructure that supports today’s needs for data and graphical exchange may not meet the requirements for greater interactivity tomorrow. Casinos grapple with the immediate demands for return on investment when the foundation of a network is built. Will the efficiencies gained from centralized control cover the costs? Will there be enough technically trained IT staff to manage and address the new forensics associated with the digital maintenance?

The Regulators
At the GLI Regulators Roundtable, representatives from the Missouri Gaming Commission spoke to some of the regulatory challenges associated with the introduction of served-based gaming tested within their jurisdiction. Gaming Enforcement Managers Blaine Preston and Todd Nelson spoke to the need for an ongoing dialogue among manufacturers, regulators and testing labs like GLI in order to lay the foundation for standards and protocols to address the new environment.

Although physical checks of the slot machines will still exist, much of the regulator’s work is moved to the back of the house. Sealed testing equipment at each game will soon be replaced with a need for sealed software. In a server-based environment, regulators verify approved software. With a username and password, a regulator is tasked with authenticating each novel piece of software before downloading it to a gaming library. Operators then run their slot operations from this library of licensed and certified software.

From a regulator’s perspective, the tests and controls boil down to a fixed list of licensed individuals who have been granted clearance to access the software that is run by the network administrator. Random and scheduled testing continues in order to authenticate games and  provide content verification. Setting a standard for the length of time a unit must stay idle before a change is made is just one of the finer points in the process of being standardized. The Missouri regulators contend that the ability to provide a secure and seamless slot experience in accord with what was deemed lawful within a particular jurisdiction is heavily predicated upon the regulators working together to build on their standards and protocols without creating disparate operating standards from scratch.

When asked about the readiness of the various gaming jurisdictions for server-based gaming, Maida pointed to the 190 of the 228 Indian Gaming jurisdictions across the country that fully accept GLI approval as their means of establishing regulatory compliance. GLI creates a baseline set of protocols and standards based on what the market wants the device or system to achieve. The regulatory direction remains flexible as technology changes. Set the baseline high, and the manufacturers have targeted functionality to design to. As technology evolves, a standard or protocol may become too restrictive or a better design may become available. Case-by-case studies in the lab highlight where regulatory expectations and a manufacturer’s capabilities intersect. Those following GLI standards can make rolling regulatory adjustments, whereas many state jurisdictions require six months to adopt a new rule. With this in mind, states like Missouri have adopted more flexible and open sets of regulations and are in constant communication with GLI to fine tune the standards and protocols that they set.

The Manufacturers
With multiple applications running tests in the lab, GLI is in the unique position of seeing up to 18 months ahead in the industry. According to Maida, there are four or five server-based gaming related products currently being tested in the lab. Different from last year, Maida contends that the products appear more robust and floor-ready than their predecessors.

Representatives from the top manufacturers rolling out served-based gaming products were represented during a panel discussion at the GLI Roundtable. The initial presentations provided an update on the state of development and deployment of technologies associated with server-based gaming.

Jamal Azzam, director of product management of downloadable & server-based gaming at Aristocrat, began the presentations with several schematics that spoke to the levels of interoperability required in order to achieve full integration on the casino floor. Aristocrat is developing games and technologies for the server-assisted environment thanks to its joint venture with Bally Technologies. Its purchase of Swedish-based Ace Interactive fuels its content and technology development for the server-based gaming environment on the Aristocrat gen7™ platform for the casino market. Azzam laid forth a timeline of further development through 2008, with possible field trials in late 2008 and likely limited adoption in late 2009, and acceptance from 2010 forward.

Jeff Allen, director of business development for Bally Technologies, spoke to the pressures of enacting server-based technology yesterday instead of tomorrow. He positioned the application of served-based technology as “evolutionary, not revolutionary.” A network of linked slot machines provides the backbone for further delivery of the richer gaming experiences that customers have grown to expect. As new casino construction occurs, server-based games can be folded into the natural replacement cycle. As the technology takes hold, regulators will be aided in doing their job, a return on investment for casinos will be realized, and the tax base for jurisdictions will grow as efficiencies are realized.

Steve Kastner, director of regulatory development for IGT, detailed the lessons the company learned through its initial test sites in Nevada, Missouri and elsewhere. IGT has had to work with regulators and operators in order to remap the process of regulation. Much of the work has migrated from the casino floor to the server side. A casino’s IT department and its gaming operations have had to become more integrated to meet the new demands of a server-based environment. Together, what the two have been able to accomplish in a subset of downloadable games must soon be scaleable and enacted in batches across a larger number of machines. Ongoing security is of great importance to protect the systems that manage the new environment as well as the floor itself. And finally, a return on investment has to be realized by the property. The development of a network may be a sunk cost, but the cost savings and enhanced gaming experience must ultimately grow revenue. The ultimate goal is to deliver a system that is secure and runs seamlessly on a network that is safe and stable. In 2008, Kastner forecasts the achievement of greater integration that delivers more rich content from multiple sources. In 2009 and beyond, he envisions greater service delivery to increase the interactive experience of the player.

Jean Brown, VP of product management for WMS Gaming’s WAP operations group, drove home the concept that a networked floor provides the building blocks for future applications. Only when manufacturers work together can an industry step up to standard technologies. WMS has submitted its first GSA-endorsed WAGE-NET networked gaming solution to the labs for evaluation and expects to commence with multiple field trials in the very near term.

Todd Elsasser, director of compliance at Cyberview Technology, painted a picture of what is to come. In six months to a year, he outlined an increase in the capabilities of real-time central monitoring, control and reporting. In one to two years, with networks in place, expect to see more skill-based games. One key for Cyberview is to build games that are based on Microsoft XNA platforms, allowing for new graphics and animation to be layered on top of replicable foundations of random number generators and other coding backbones. Skill-based games are complex in that they rely on physical ability and dexterity, and may involve group play. Younger generations have grown up in a highly interactive gaming environment and will demand more arcade-like capabilities. But skills aside, even weak players will need a chance to win. The minimum return to player (RTP) will become more important and will need to be regulated accordingly. Elements of paid time on the game will be introduced, which presents another set of challenges. A controlled game in today’s environment may last for seconds, while tomorrow it may last for 20 minutes. Dispute resolution, the administration of loyalty programs, and other issues will all have to be addressed by manufacturers, regulators and operators.

The Debate
Put five manufacturers in a room with regulators and there will inevitably be some back-and-forth about server-based gaming. When is it going to get here? At what point will a return on investment be realized? Will the obsolescence of technology be stepped up to push the adoption of networked facilities? What kind of cable connection and network will not be obsolete itself in the short term? How open will the systems be in order to ensure interoperability?

The panel said that networked floors are here. Manufacturers are being choosy about the flagship jurisdictions in which they will beta test their devices and systems. Allen contends that a five- to seven-year window is a normal cycle of game obsolescence, with games older than 10 years being more difficult to support. The carrot for new games is in the rollout of applications that provide a richer gaming experience. The stick is the threat that an operator doesn’t want to get stuck without the capability to accept new applications without the proper bandwidth to support them. Games will begin to migrate from their existing platforms more modern variations that incorporate new functionality. Industry articles following G2E bemoaned the lack of a must-have application from one manufacturer, which would press the immediacy of the adoption of this technology in every casino in every jurisdiction.

The demand for immediate ROI is yet another stumbling block. Efficiencies on the floor may not cover the investment in networks for larger properties. However, the applications that demand greater bandwidth necessitate the investment. “Efficiencies” can be a scary word. It means that there may no longer be a need for as many slot techs in their current form. Like the introduction of TITO, particular roles do not entirely become obsolete, but the scope of the jobs servicing slot machines may change. In effect, the personnel demands change. A greater demand for savvy technicians arises. Efficiencies can also describe the ability for players to find their games without needing to go find them. Such efficiencies have a more positive impact on revenue.

Waiting for greater clarity regarding server-based gaming is not an option. Maida underlines that early adopters benefit significantly when it comes to server-based gaming. The alternative is to be paralyzed by fear, making it all the more difficult to catch up.

The Future for GLI
It should be an exciting year ahead for GLI. The Lab continues to increase its own operating bandwidth with expansion plans underway in Las Vegas, and having just doubled its space in New Jersey and moved to a larger facility in Golden, Colo. Facilities in Holland and Australia have also benefited from expansion with the introduction of new offices in Macau and Melbourne. Maida expects to continue to expand with the industry. Delivering developmental feedback to manufacturers and aiding regulators, while maintaining the integrity of the business, is of the utmost importance to Maida.

Greater interest in the GLI Regulators Roundtable is also expected to build. From 22 people in attendance seven years ago to upward of 280 expected next year, the need for regulators to meet with each other and lay the groundwork for further evolution grows, and GLI is poised to grow with it.

Note: For more information on Gaming Laboratories International, visit www.casinoenterprisemanagement.com and click on current issue.

What is the GLI Regulators Roundtable?
The GLI Regulators Roundtable is a two-day annual conference that gives regulators an opportunity to discuss the latest technologies that affect gaming devices and regulations. This year, the event took place Feb. 6–8 at the Tuscany Suites & Casino in Las Vegas, followed by a tour of the Las Vegas GLI facilities Feb. 8. GLI presents the roundtable free of charge as a service to regulators.

GLI will also host a European Regulators Roundtable and Workshop April 10–11 for European regulators at the Van der Valk Hotel near Schiphol International Airport in the Netherlands.

GLI provides further training to regulators in the form of an annual in-service training seminar for the staff of gaming regulatory agencies and commissions to give them the opportunity to learn about the testing process and on-site inspection techniques, and to better understand the purpose for forensic examination.

For more information on GLI and its Roundtable series, visit www.gaminglabs.com.

Nicole Barker is a marketing consultant and writer. Following a role as Direct Marketing Manager for Harrah’s Las Vegas, Harrah’s Laughlin and the Rio, she started her own company, Barker Enterprises Inc. She can be reached at (702) 579-5825 or nbarker@barkerenterprisesinc.com.