Global Cash Access

Apr 20, 2010 7:06 AM

High-tech creativity has altered Michael Rumbolz’s big picture view of the gaming business.

The former Nevada Gaming Control Board chairman says the business of getting cash into the hands of players has his attention in a big way, the last few years. It’s a sector of the business where technology is playing a key role.

He did not pay much attention to cash access services and their role in the casino business during the 1980s when he served, first as a deputy attorney general assigned to the Control Board and later as its chairman for a year and a half during the 1987-88 period before moving into operations as an executive in the Donald Trump and the Circus Circus organizations.

"Even now," Rumbolz says, " a lot of people who are in and out of casinos regularly don’t pay much attention to the ATMs. They have become so ubiquitous."

But the picture, he stresses, is changing as the publicly traded Global Cash Access goes through the myriad steps that will move some of its new products on to casino floors.

Rumbolz became CEO and Chairman at Cash Systems Inc., which was sold to GCA in September 2008. He’s currently serving in a capacity that has him offering "strategic advice" to GCA.

GCA will be making headlines this year, he says, with its introduction of "ticket-out products." All this is taking shape as a result of its existing technology and a proposed agreement late last year to purchase Western Money Systems (WMS).

"Western makes the redemption boxes that you see in many of the Boyd and Station casinos. This purchase, when it closes, will provide a foundation, because those boxes can also be ATMs – bill breakers, etc. Those will be very convertible to allow patrons to use an ATM card to buy a ticket and then use those tickets in the gaming devices, and to do the redemption of points and have that spit out as a ticket – a buffet coupon or whatever."

This WMS deal is expected to close toward the end of the second quarter and will then move forward, "because they are getting licensed now in a variety of jurisdictions . . . GCA will be adding its proprietary functionality to these boxes, which are now at all the Seminole locations, the Station properties and in California and Oklahoma."

Rumbolz continues, "One of the things I like about GCA, the reason we decided to sell CSI to them, they have a real vision of the future.

"They realize that you cannot stand still, doing business the way you’ve always done it. They recognize that as the population ages, there are new customers coming in who have had different life experiences …

"Customers in their 30s and 40s have grown up with a computer screen in front of them their entire lives. The notion of social networking through something like Facebook, they are totally comfortable with. Many of these young adults have never known a time when there was not e-mail."

Rumbolz’s point: Depending on a computer or an electronic gizmo in a box to do the right thing does not require a big leap of faith for this generation.

He says, "The thing GCA does that none of the other new high tech-based companies do is allow customers to go outside the four walls of a bricks and mortar environment and bring cash back in."

This kind of technology, as Rumbolz explained it, allows players to draw down money from a credit card or bank to the casino and then transfer the money from a cage account to the machine.

"When you’re through playing, you can transfer your money back to the cage and keep it in an account there or take it all home with you."

The system has been tested in a Palm Springs Indian casino for about the last year and a half where, according to Rumbolz, "market acceptance has been established . . . The ability is with the house to make a direct offer of some kind to the customer, to say, hey, if you want a ticket we will add a number of points to your account or whatever incentive the casino thinks might be attractive."

There’s a final important point.

These and other such products will not come to Nevada any time soon, Rumbolz says, for several reasons, "not the least of which is Nevada is the only state having a statute that says you may not use a credit card in a gaming device.

"My view," he adds, "is that the statute does not apply to this product. It might be argued that the club card is a proxy for a credit card but everything is okay in other states and Indian casinos."

Rumbolz is optimistic the Nevada barrier can eventually be removed, but until that happens the technology will get plenty of action elsewhere.