Regulators ‘treasure’ new age slots

Feb 26, 2008 12:46 AM

Highly-touted server-based gaming, the newest slot technology expected to revolutionize casinos over the next few years, was the topic of discussion for gaming regulators at the recent Regulators Roundtable and Users Conference at Tuscany Suites hotel/casino in Las Vegas.

The new technology will allow casino operators to change their machines’ games, payouts and promotions from a central server. Eventually, the system will include personalized communications and incentives for players, such as bonuses and slot club news, as well as individual TV monitors for watching sports or other events.

While server-based gaming provides the casino flexibility in tailoring its slot floor to match the changing customer profile, one regulator suggested it’s also a means "to take more of your money."

While the quip was made tongue in cheek, the concern that "Big Brother" in a back room can change the way a machine pays out was a concern for gaming regulators.

Thus much of the conference was dedicated to learning how the system will be implemented and crafting regulations to govern their operation.

"The reality is, many of the technologies we have been talking about in theory for the last couple of years are here, ready to go onto the casino floor, and it is imperative for regulators to fully understand the technologies and the potential impact they many have on jurisdictions," said GLI President and co-founder James R. Maida. "That’s why we present the Roundtable free of charge, to help protect the integrity of the industry."

In Nevada, for instance, regulators mandated that machines could only be altered after four minutes of inactivity. After the time lapse, a message would pop up on the screen indicating the machine is being serviced. When the changes are completed, the message disappears and the machine is ready for the next player.

Today’s slot machines — which bring in the lion’s share of casino gambling revenue — are a far cry from the old clunky metallic boxes with spinning reels.

The move to cashless gambling earlier this decade fueled the last major replacement cycle, boosting earnings and revenue growth for gaming equipment makers. The next big industry push is server-based technology, which will allow casinos to link all slot machines on the floor and control their offerings from a central computer.

"Casinos have even been putting off replacements because they’re waiting for this new technology to be put into play," says Dan Ahrens, manager of the Ladenburg Thalmann Gaming and Casino fund. Server-based gaming should begin to take hold in 2009, adds Ahrens, and the new technology will serve as an earnings catalyst for manufacturers for several years out.

While casinos aren’t expected to begin changing over to the new technology until the end of this year and the beginning of 2009, a trial system has been installed at Treasure Island in Las Vegas.

MGM officials said most players don’t see much difference between the server-based slots and other machines on the floor.

"The untrained eye won’t spot it," Steve Zanella, who oversees MGM’s server-based program, told the Las Vegas Sun. "There’s nothing on it that really makes it stand out."

Zanella added, so far, there’s been no glitches in the system and "nothing out of the ordinary" has occurred.

Treasure Island’s system includes 32 slots on the casino floor. Once the field trial is successfully completed, the system will be available for licensing throughout the state.