Casino Enterprise Management

Last month I discussed the evolution of the use of computing technology in the gaming industry. The industry is experiencing the natural progression from slot accounting and casino management to a powerful network that will enable experience management—the ability of operators to dynamically manage and optimize the experience of their players. This is a progression that has been experienced by many other industries. As it sweeps through gaming, it will transform how operators connect with their customers and compete in the market. I also discussed 10 areas where the new network can enhance operating profit. This month I want to discuss six requirements for the successful implementation of experience management.

The challenges of bringing the power of the Internet to the gaming industry do not differ significantly from the myriad of other industries that have been forever transformed by this evolution. With the exception of regulatory restrictions, the nature of which is unique to gaming, the requirements for success are very similar. It begins by building on an open, modern network and providing convenient customer (player) access to that network. Most importantly, the network must provide compelling offerings and services to players to attract and retain their patronage. Once the player experience becomes dependant on the network, then operating and managing that environment to provide a reliably high quality of service becomes critical. Along the way, the network will collect the data that, if properly processed, will enable better decisions and more effective implementations. And finally, imagination and creativity will play key roles as operators work to enhance the player experience while differentiating themselves from their competitors.

Open Networks
The existing “networks” on the casino floor are remarkable in that they are some of the few remaining vestiges of serial networking technology from the early 1980s still in use in the corporate world today. Compared with the Ethernet networks that are deployed in the business offices of virtually every casino, casino floors lack bandwidth (network capacity), flexibility, reliability and cost effectiveness.

Perhaps more limiting is the fact that the existing networks are not “open.” That is, the software protocols and hardware interfaces that enable the traffic on the networks are proprietary, controlled by a single vendor. This limits the operator’s choice, as all components of the network must be acquired from the original vendor.

One of the fundamental breakthroughs that will enable experience management is the implementation of a modern, open network across the casino floor and property. Replacing the existing serial networks with an Ethernet backbone provides between 50 and 400 times more network bandwidth, enabling a richer, more fulfilling experience for the player. It also eliminates the existing proprietary hardware networking components. Interfaces and switches will be available from a multitude of vendors. Because of increased competition and superior economies of scale, these new components are faster, cheaper, more reliable, more flexible and more manageable.

On top of this physical infrastructure run the open software protocols that were forged in the crucible of the Internet. This is the proven technology that enables you to securely transact with your bank online, Wall Street to transfer billions of dollars each day, and Google to provide search services to tens of millions of simultaneous users. Overlaying all this is the important work of the Gaming Standards Association (GSA). The GSA defines a standard set of Internet protocols and conventions to be used when communicating to games (G2S) and between systems (S2S).

The end result of these protocols on top of the Ethernet backbone is an open network, and open means more choices. Instead of being held captive by a single vendor, an open network provides operators the ability to choose from among multiple vendors and to mix and match various components and applications in order to tailor the environment to the needs of the business. This shifts more control to the operator. It also attracts and concentrates investment and creativity. Instead of being dispersed among multiple incompatible environments, development is focused on the one standard environment. It also provides a stable and open environment that attracts new vendors and new investment. And this provides the operators with yet a greater choice. We have certainly experienced an amazing blossoming of capability on the Internet. This same phenomenon will happen on the casino floor.

One item of caution: “Open” is a relatively new concept in the gaming industry. It may take some time before there is full alignment between operators’ expectations and the existing vendors’ behavior. An open network is not the same as “open source.” The former promises interoperability and greater choice; the latter promises free software. Given the significant investment required to build the applications that will deliver experience management, this software will not be open source and free any time soon. Of course, this is no different than buying databases from Oracle, operating systems from Microsoft, or accounting systems from SAP. On the other side of the equation, the existing systems vendors are used to competing in an environment protected by proprietary technology and aggressively litigious protection of patents and intellectual property. Often their motivations have been driven more by selling more game machines than systems. Operating in an open environment is a new experience for these vendors. In the end it will be the operators, through their purchasing power, who will influence the behavior of the vendors.

Replacing an existing floor network or building out the network in a new casino is a significant investment. However, this modern open network is a fundamental requirement for moving toward experience management.

Player Interface
An open network is only interesting if it can reach out and touch the player. Just as the Internet would never have happened without the development of the browser, experience management will not happen unless players have a simple, convenient interface to the network. Today an operator primarily interfaces with the player through hosts and staff or direct mail. “Online” interfaces are limited to e-mail broadcasts, the website and perhaps some form of player interface installed on the slot floor. In order to fulfill the promise of experience management, the online interface will have to take a quantum step forward.

The player interface has two important aspects: the physical interface and the content of the interface. The vast majority of player interfaces built into today’s slot machines are crude in both respects. The physical player interface device is small, out of the line of normal sight, primitive as to the GUI (graphical user interface), and inflexible. The content projected to these interfaces is both limited and inflexible.

Bally’s iView and IGT’s sb NexGen represent steps forward in regard to both the quality of the physical interface and the ability to customize and manage the content. However, the concept of the service window, which builds the player interface into the interface of the game itself, is ultimately the right answer. Thus, there is one powerful interface for the player to access both the game and the services and offers provided by the operator. Because the service window leverages the user interface technology of the Internet, it enables the delivery of “rich content.” Think about delivering the rich experience of an Apple iPhone through the game to the player. Best of all, the content is under the control of the operator. Operators can customize the player experience to project the brand of the property and differentiate themselves from the competition.

The next step is to propagate this interface across the property. It will start with the slot floor. However, the network means that it can be anywhere. It can be at the gaming table, in the bar, at the restaurant, at check-in, in the hotel room, and on the player’s mobile phone. The more effective and pervasive the player interface, the greater the opportunity to reach out and touch the player.

Services
A “service” is an application delivered via a network. For example, Google has built an application that will search the Internet for keyword associations. What Google delivers to you when you type www.google.com in your browser is a service that enables you to tap into the wealth of information residing on the Internet. Thus, in our context, a service is the application that offers the player an enhanced experience. It is the services that constitute the most important element in experience management. Players do not experience the network, they experience the services delivered by the network.

The ability for a player to convert cash to tickets and to cash out again is a service. The ability to accumulate, track and redeem club points is a service. The ability to call a host, order a drink, make reservations or check in is a service. The ability to find a friend, find a game or find the bar is a service. The ability to compete in a tournament, compete for a bonus or progressive, play a communal game, or even play the game itself can be a service. The diversity and richness of the services are limited only by imagination and the ability of someone to create and deploy the underlying application.

Many of the services noted above can be delivered on today’s serial networks. The modern open network will enable more and richer services that make more enticing offers to the players. It will allow more flexibility in how a given service is offered to a specific player. Because of the openness, it will allow more vendors or operators to create services and allow those services to interoperate on the same network and be presented through a common player interface.

Initially, much of the development efforts behind experience management will be focused on building the basic infrastructure and core services. However, over time the energy will become focused on creating better and more compelling services. We need only look at the Internet itself to predict this. The Internet was originally built around two core services: e-mail and file transfer. But as the Internet became the center of the connected world, there was an explosion of compelling services from online shopping and searching to iTunes, Facebook, MySpace, YouTube and so forth. Imagine this creative energy applied to the casino network.

IT Operations
One thing we have learned from the existing TITO networks is that they are mission critical. When they go down, the slot floor comes to a grinding halt. As operators expand the online services that constitute a fundamental part of the player experience, the quality and reliability of those services and the underlying IT infrastructure becomes increasingly important. For most operators, this will require an investment to upgrade the abilities of their IT operations.

This is not news. Many operators have been upgrading their IT groups over the last five years. More CIOs are being recruited from outside of the industry to tap best practices and talent. There is an increasing focus on traditional datacenter and networking skills and disciplines—what we call the abilities: scalability, availability, reliability, manageability and security. There will be a need to manage more systems and more interfaces. The hospitality systems, the point-of-sale systems, and the casino and experience management systems will all interact to manage the player experience. More importantly, all systems that touch the player will become business or mission critical and must be architected, implemented and managed appropriately.

Business Intelligence
The tools provided to the operator by experience management and server-based systems are powerful. Used properly they will help operators tune their offering to the players and maximize their profits. Used improperly, they can just as easily do the opposite. Experience and intuition will always be important; however, the ability to make decisions based upon good data will be critical.

The network will generate and capture an incredible wealth of data. It will be up to the operators to harness this data and turn it into a competitive advantage. This data can be used for building player profiles to enable personalization; segmenting the player population to manage and tier offers and reinvestment; optimizing offers/promotions, floor layouts and game mixes; and justifying and optimizing investment decisions. The possibilities are nearly endless.

Building effective business intelligence systems is never as easy as it would seem. It requires both a good system implementation as well as the skills to exercise the system and glean the powerful insights embedded in the data. There are a number of internally developed systems and a growing number of external options from various vendors. The key will be to combine the power of the modern data analysis tools with an intimate understanding of gaming operations.

Imagination and Creativity
Once we get beyond the initial implementations and work the bugs out of the infrastructure, the focus will shift to the creation and deployment of the services and the creation of the offers that will entice the player and differentiate the property. Ten years ago we never imagined all the services that became available on the Internet. Likewise, we will struggle to imagine all the services available to the player 10 years from now. But they will come. The potential gaming profits are sufficiently great that they will attract large investments from existing operators and gaming vendors. And because the network is open, it will attract a myriad of new entrants, some small and entrepreneurial and some large and experienced in other industries, such as Microsoft or Oracle. When this happens, there will be an incredible blossoming of the choices available to the operators. The challenge for each operator will then come down to deploying the right portfolio of services to optimize the experience of its player base and meet the needs of its business.

Changing Tides
For the last 10 years, the gaming industry has held back the tides of change fomented by the Internet—the power to use a network to connect with the customer. Like a river too long blocked, the waters will inevitably wash over even the gaming industry. The smart operators will lead the way. Having a clear vision of their brand and of their player base, they will learn to harness the power of the network. They will create a superior experience for their players who, in turn, will reward the operator with more revenue and profits. Over time this capability will become embedded in the fabric of the casino experience. Like coins, we will struggle to remember what it was like before experience management systems. And the gaming industry will be forever changed.

Andy Ingram was the Senior Vice President of Network Systems at IGT, where his group took the lead in defining server-based gaming and the concept of Experience Management Systems for the casino.  Prior to that he spent 25 years in the high-tech industry working for Sun Microsystems, Hewlett Packard, Cray Research, and Sequent. He can be reached at andy.ingram@gmail.com.