Glitz, glamour and ... geeks?

Glitz, glamour and ... geeks?

Casinos have long been associated with glitz and glamour, but with IT systems becoming critical for the gaming industry, the 'geeks', and their handiwork, are becoming increasingly entrenched in the 21st century gaming palaces.

''Information technology is a critically important component in running a modern casino," observes Nicolas Pechet, strategy director of business intelligence consultancy Fusion Consulting. "From security through to CRM and room inventory management, IT touches virtually every aspect of a casino's operations." With competition in the gaming industry intensifying, IT is going to become more important than ever in the workings, not only of casinos, but of the entertainment resorts that are being built around new generation gaming developments.

Gambling palaces

Chances are, if you live in the Asia Pacific, some of these gambling palaces are already setting up near you. After years of holding out against casinos, governments in the region are acknowledging the economic benefits, and tourism-boosting abilities, of gaming.

The general idea is not to encourage gambling per se, but to stimulate regional economies which are feeling the need to maintain growth in the face of increasing nearby competition.

The Singapore government, selling the idea to a doubtful public, explained that the 'integrated resorts' (IRs) it was proposing, would boost tourism, which was facing fierce competition from Hong Kong and Thailand. Furthermore, the IRs would also bring in billions of dollars in investment, and create up to 35,000 jobs, both directly and indirectly.

Two years ago, Singapore awarded licences to two projects to develop two integrated resorts-casinos, with other amenities such as hotels, restaurants, shopping malls, convention centres, theatres, museums and theme parks.

The goal is to double visitor arrivals to the island state to 17 million by 2015.

Las Vega Sands, which won the bid to build the Marina Bay Sands resort on a site at Singapore's Marina Bay, has committed US$3.67 billion and plans to open by next July. Three 50-storey hotel towers are expected to be built around the casino.

Genting International, which already runs two casinos in Malaysia, won the contract for the lion city's second casino, a US$3.85 billion venture, including a Universal Studios theme park and a huge outdoor marine park, due to open in 2010 on Singapore's Sentosa island. Genting's casino resort is central to the government's US$9 billion redevelopment of Sentosa.

This April, Star Cruises and the Alliance Global Group entered into a 'heads of agreement' to jointly develop and operate hotel and casino complexes in the Philippines.

A PricewaterhouseCoopers report on the Global Entertainment Media and Outlook: 2008-2012, anticipates that major casino projects in Pasay City, in the Philippines, and in Singapore, will boost overall gaming growth in the region.

Three casinos opened in South Korea two years ago, with Malaysia's Berjaya planning another US$600 million casino and hotel resort on Jeju island. Not willing to be left out, Japan, Taiwan and Thailand are also looking into legalising casinos.

Besides all these new and potential projects, there is also the ongoing development of Macau. In 2006, the enclave overtook the Las Vegas Strip to become the world's biggest gambling centre, measured by total gambling revenues.

Macau's gambling revenue that year soared 22 per cent to hit US$6.95 billion, according to figures released by the local administration, compared to US$6.5 billion for Las Vegas. It continued its winning streak last year, when Macau's casino revenues rose a dizzying 46.6 per cent, to about US$10.4 billion.

The PricewaterhouseCoopers report estimates that this year, Macau will surpass Nevada to become the largest single market for casino gaming.

One industry which promises to get a fillip from this casino resort building is the IT sector, if the Macau experience is anything to go by. "With many new multinationals entering the market, Macau businesses need to continue to identify ways of differentiating their products or services in order to maintain and grow customer share," says Pechet. "Businesses across banking, casino and the hotel industry invariably are turning to IT systems and solutions as a means to improve the delivery, quality and cost effectiveness of their products and services."

According to the company's recent research, Macau's IT industry is expected to grow at about eight per cent a year to 2010, with the gaming and hospitality sectors leading the way. IT investments are expected to focus on industry-specific solutions, aimed at solving the IT requirements of hotels, resorts and casinos.

Pechet says casinos accounted for about 45 per cent of total IT spending in Macau last year. Moreover, casinos reported spending an average of US$400,000 to US$2.6 million per annum on IT products and services.

As a result, says Fusion, global IT players like HP, IBM, Dell, Sun and Microsoft have all established operations in Macau "to tap into the opportunity presented by more than 10 new casinos due to launch over the next three to five years".

So what sort of IT systems would these casino resorts want?

The IT needs of a typical resort set-up would likely be rather standard, like e-mail, network security, accounting, customer relationship management (CRM), hotel management (room reservations, inventory management, etc), customer billing systems, in-room video entertainment systems and e-commerce capabilities, for online bookings via their website.

New gaming devices

For the casinos themselves, however, the IT systems most likely to be used will be in the areas of new gaming devices, visual surveillance systems, and business intelligence (BI) technologies, such as customer data mining. Sources say that whether hotel rooms are 'available' can sometimes depend on whether the applying potential guest has a reputation as a prolific bettor or high roller.

Ticket-in/ticket-out technology (TITO), in place in the US for some years, has led to completely cashless slot floors in most major American casinos. Casino operators say that removing coins from the equation is more convenient for customers who no longer have to wait for cash payouts. TITO also dramatically decreases cash handling costs for the operator.

And, as in every other business enterprise, innovation is on-going for casinos, always on the look-out for new techniques to maximise profit.

New gaming devices include turning the traditional slot machines into dumb terminals, rather than discrete boxes dedicated to one game each. Instead, there will be just a single network, with games stored on servers, ready to be called up to any terminal.

Server-based gaming (SBG) technology will allow casino officials to change the games according to what is popular at any given time. Regulations to govern server-based gaming are being developed in individual US states. Nevada has introduced regulations to prohibit the casino from changing the game while a customer is playing. The machine must be idle for four minutes before a change is made, and then after the change, another four minutes must pass before anyone can play the machine.

Chips in chips?

Wynn Las Vegas started the RFID chip approach rolling three years ago, putting radio frequency identification (RFID) tags into its casino chips. These tags allow readers, linked to the casino's computer systems, to detect counterfeit betting chips.

By installing RFID readers and computers at game tables, staff can tally the chips being wagered, and double-check the reader's figure with what has been laid on the table. This should expose cheats who attempt to add more chips to their bets if they win. Cashiers can also check the RFID tally against chips that are cashed in. These systems can be used to mathematically calculate whether somebody is a good player, or a cheat.

In addition, the 'smart chips' can help the casino check on the credit they issue to gamblers, and so help the casino manage its risk. If the serial numbers in the chips they lend out are mostly returned by a different customer, it could be a sign that a player is 'lending' his credit to another player, which is not kosher.

The RFID system can also be used to monitor players, to offer them free rooms, meals and perks depending on how much they bet, and how often, in order to keep the loyalty of the biggest betters.

Black glass domes

According to Fusion, video monitoring and supporting systems such as software, storage and analytics are the most significant areas of IT expenditure for casino security.

"Casinos make use of some of the most sophisticated video systems in the world," notes Pechet. "Most casinos have invested millions of dollars in extensive video coverage throughout their properties, with high-density coverage of the gaming floor. Many large casinos have several thousand video cameras installed on their properties to do so, all controlled from one central command centre."

While most casinos still use analog video surveillance systems, some with the latest technology use IP, or digital, video systems. This high-tech route brings with it more innovative features, making it easier to track security threats. Pechet points out that it can give an added edge to general operations, as "the software can also interface with various casino management systems focused on improving customer service. For example, video systems can be used to identify areas that need more staff".

Indeed, casinos may be leading the way in the 'big brother' approach, keeping an eye on us.

"In many ways, the gaming industry is pushing the envelope of technical innovation in surveillance, both visual and behavioral," says David G. Schwartz, director of the Center for Gaming Research (CGR) at the University of Nevada, Las Vegas, in the CGR website.

"Casino surveillance is interesting because, within a casino, patrons and employees accept levels of surveillance that they would find intrusive elsewhere. So casino operators have had a virtually free hand in developing systems to track people and money throughout the casino complex. Facial recognition is one of the latest innovations, as are systems that automatically scan for certain persons or actions."

If surveillance cameras zoom in on suspected cheats, the image can be analysed by software, comparing the face against a database of unwanted individuals. So known cheats, or those forbidden to enter, can be kept out, and suspicious behaviour can be tracked.

Know the customer

Despite all the snazzy surveillance and gaming equipment, perhaps the most valuable IT system that a casino can have is customer data mining.

"As the competition continues to increase, the only way casino resorts can set themselves apart from their competitors is to know more about their guests than their competitors. As a result, customer intelligence is a critical element in helping casino resorts to understand their guests - to know who they are, where they're coming from, why they're here, what their likes and dislikes are," asserts Jason Tang, head of practices and solutions at the SAS Institute.

The first thing a casino resort must do, he says, is consolidate a vast quantity of visitor data into a clear picture of guest profiles and market segments, to give resort executives the ability to devise and manage timely, personalised customer communication strategies.

Data integration systems can collate data from nearly anywhere in a casino resort, from credit card payments in the gaming centre, to the type of services used in a spa.

So important is knowing the customer that other systems can link into it. For example, Pechet thinks the surveillance system could feed into CRM-related marketing and promotional services.

eye movements

"A sign might be activated when a customer passes by a camera with the help of integration with video analytics. The system can be used to adjust digital signage based on changes in a customer's level of interest, which can be tracked by analysing the customer's eye movements. Digital analytics can identify a person's age and sex, allowing the casino to change a sign's content to fit the demographic."

Harrah's Entertainment famously collated customer information from all 26 of its casino resort properties, tracking customer via their 'total rewards' loyalty card, getting a real-time insight into its customer activity.

VIP customers

Harrah's leveraged on this single, real-time source of customer information, getting its hosts to call VIP customers who had not visited recently, had missed a trip recently, or were showing increasing spending with the casino, says Adam Sarner, principal analyst, CRM at Gartner, in a 2004 case study.

"Harrah's felt that these calls would be relevant to the customers, increasing the likelihood of a trip to the casino and a good opportunity to build a relationship," he says.

The results were a 20 per cent growth in revenue for the VIP segment as a whole, and 30 per cent to 69 per cent revenue growth, depending on the customer segment contacted.

Other new technologies coming online, such a mobile gaming, will also significantly affect the casino gaming industry. Using this system, players would be able to use devices, similar to Blackberries or pagers, to play games while they are at the pool or on some other area of the gaming resort property. Nevada approved mobile gaming last year and other US states are considering it.

integral part

Whatever its level of efficacy, it is clear IT systems have evolved to be an integral part of the glitz and glamour of casino resorts.

"As part of the Las Vegas Sands Corp portfolio of integrated resort properties globally, Marina Bay Sands is able to leverage the existing IT framework to achieve economies of scale and ensure that information flow is seamless," says Gregory Dauenhauer, director of IT, Marina Bay Sands.

"By maintaining an enterprise foundation of core solutions, local, as well as global, performance is maximised," Dauenhauer says. "Further, by aligning our IT systems upon completion of Marina Bay Sands, our team members are able to benefit from the exchange of critical data, such as in the areas of customer relationship management and human resource management."

Despite the critical importance of information technology in casinos, most senior IT executives for existing, and planned, gaming houses in this region, declined the opportunity to comment for this article. They want to 'play their cards close to their chest', ostensibly to keep their security strategies secret, but there is no doubt that the pending new casinos, together with the established ones, will be adopting the latest technology to keep their profits strong.

A casino cheat's perspective

On his website, Richard Marcus calls himself the world's number one casino and poker cheating expert. He declares that technologies, being employed as anti-cheating measures, will never stamp out the problem of cheating.

But, he says there is a crumb of comfort for casinos, which is that while cheaters may prosper for a while, the party won't go on forever.

In his book The Great Casino Heist, Marcus, who claims to have never been convicted of any casino-related crime, outlines one of his cheating methods. Called past-posting by casinos, it employs sleight-of-hand to switch to chips of higher denomination, once it becomes clear a bet would win.

At the roulette table, it works by positioning a cheat near the spinning roulette wheel, who would signal a losing bet as early as possible, whereupon his accomplice, who was at the far end from the dealer, would whisk off the small bet he had put down, and replace it with a larger bet. The quick change usually goes unnoticed in the excitement of the table. If, and when, they were challenged, the cheats had ready excuses prepared.

Facial recognition

Marcus believes radio frequency identification (RFID) could only enhance chip management within the casino's cash 'cage'. He reportedly says he doubts its efficacy at casino tables. RFID is not the first technology to be tried out, he noted. Many systems have been discarded as more trouble than they are worth.

"Let's say they do eventually get this stuff working on the table," he says. "A really good cheating team is going to come up with some way to screw around with the chips and the signal."

As for facial recognition technology, Marcus declares it "an absolute zero," asserting "there's not one person alive who's ever been caught by

facial recognition." He proclaims: "I don't have to go back into a casino to know my moves will still work."

The main reason for his confidence is that technology is just a tool for casino workers. And in his book, the one-time casino dealer explains that "practically all casino jobs are monotonous.... When you stick people into a dead job like that, their brains are not being nourished, and they quickly lose interest.

"I don't have to fool the camera or the technology," is his boast. "I only have to fool the dealer or his pit boss. If I fool them, the technology doesn't come into play."

Fairfax Business Media

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