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Cash Games

The evolution of delivering money to casino players

Cash Games

It began as a major detour, dwindled to a speed bump and now gravitates toward the rear-view mirror of gaming’s financial journey.

The Europe, Master Pay and Visa (EMV) fraud liability shift, making ATM owners rather than card issuers absorb the cost of theft, dawns more subtly than once expected next month. The deadline initially brought panic in some casino quarters. They mirror changes unfolding last fall in convenience stores, requiring owners to adopt chip technology over the magnetic card in order to maintain theft protection. If customers don’t invest in new technology—designed to make POS theft nearly obsolete—they assume fraud risk.

Small operators weigh the odds. Big operations, like casinos, upgrade. Bad enough, they reason, that override codes have occasionally made ATMs think they contained $5 bills rather than 20s and thus dispensed $1,000 on $250 transactions. At least those episodes were isolated, finite, and could be addressed with a financial institution.

Yet what if operators lack recourse for bad checks, insufficient funds or hacking in a business containing billions in seed money planted in ATMs and related disbursal vehicles? That would handcuff the lucrative funds transaction process.

Companies that supply casinos come to the forefront. They moved well ahead of the deadline to ease operator concerns and protect their own lucrative accounts. Their products mix the secure realm of chip cards with the aggressive functionality of bill-breaking, TITO, check-cashing and, even, player identification. ATM fees are steep enough for tiered players to value a property waiving them. New technology rapidly brings operators toward the age when they can provide the reward, easily, right at the ATM.

Score one for the vendors. They saw the financial roadblocks in new regulations, adjusted their product-line GPS and now steer customers around the problem.

For many operators, the adjustment may be no worse than a NASCAR pit stop.

Everi Angle Covered

Everi has already begun recouping a major security investment.

In March, the Las Vegas company said it was the first in the casino industry to offer an EMV-chip signature option for an ATM device. It is fully end-to-end EMV-compliant with all its financial transaction devices, platforms, and systems used at hundreds of casino properties across the U.S. Startup costs impacted the first-quarter bottom line, but rewards will soon materialize, according to Michael Rumbolz, its president and CEO.

 “We continue to see increases in total cash to the floor, and we benefited from higher kiosk sales relative to Q1,” Rumbolz recently said in a conference call regarding second-quarter company earnings. “As anticipated, the first quarter charges and fraud losses that were associated with the implementation of our full end-to-end EMV solution within our payments business were significantly lower in the second quarter. Overall, we were pleased with our performance in Q2 and we are looking forward to the second half of the year with a particular focus on maintaining the pace of our execution on our key initiatives.”

Everi continues to showcase its sleek and modern CXC 4.0 L multi-function kiosk, designed to offer casinos integrated cash handling solutions and critical cash access services. The CXC 4.0 L kiosk is Everi’s smaller-footprint solution, and includes beneficial features such as multiple ticket redemption and easy bill breaking. With all the company’s payment solutions, the CXC 4.0 L is EMV-compliant and equipped to handle EMV-chip technology, which can significantly reduce fraud when combined with other forms of payment security, company officials say.

Everi also provides video and mechanical reel gaming content and technology solutions, integrated gaming payments solutions and compliance and efficiency software. Its service range includes ATMs, fully integrated kiosks, products that improve credit decision-making, compliance and data solutions, along with online payment processing for operators who offer intrastate, internet-based gaming and lottery activities.

While Everi has an array of products, it paid particular attention to compliance, according to Tim Richards, senior vice president of payment innovations for Everi Payments.

“Transaction security is the responsibility of the payment provider, and lack of security by a casino’s chosen gaming payments provider can have a detrimental impact,”  Richards says.

“Everi is the first end-to-end provider of EMV to gaming. Our rollout of EMV-compliant devices included the required compliance with POS cash advances, and it was supplemented by a full compliance for all of our ATMs, well ahead of 2016 and 2017 deadlines imposed by Visa and MasterCard.

“We also worked with the EMV oversight group, EMV-CO, to specify a new transaction type allowing for the initiation of a signature-based transaction at an unattended device to meet card network rules for cash advances. All of our EMV-compliant transactions are completed securely on our PCI DSS 3.2-compliant, active/active payments network.”

An operator can never be too prepared, he asserts.

“From loss of funds to the gaming floor to higher decline rates and other imposed transaction limits, cash access transactions conducted with limited, or out-of-regulation, security is not an option for gaming operators.”

Rolling Along

Cincinnati-based Vantiv brought gleaming credentials into the gaming world. It handles more than 23 billion transactions worth more than $842 billion annually. Its retailers include non-gaming industry giants like Wal-Mart, CVS, Kroger, Macy’s, Wendy’s, Nordstrom and Walgreens.

Gaming offered an ideal expansion area. Three years ago, the company launched Vantiv Gaming Solutions, which became Vantiv Entertainment Solutions, reflecting its intent to help casinos, iGaming, lottery and social gaming operators build strategic pay programs. Vantiv provides the connectivity for anyone using a card to fund gaming purchases.

Amid this explosive growth, operators seek shelter from costly hacking. They tap into a logical extension from the convenience-store realm, according to Joe Pappano, senior vice president and managing director of Vantiv Entertainment Solutions.

“This is the evolution of how payments are going to occur domestically,” Pappano indicates. “It’s an experience that’s been used successfully in other countries for quite some time. There may be a belief that it’s going to impact the customer experience because the transaction is going to be delayed. There is a slight trade-off between the speed of the transaction and the security of the data, but it is ultimately more important to enhance security and reduce fraud. What matters is the safety and soundness of the financial ecosystem.”

As one door closes, another opens in the battle between hackers and operational security. Pappano told GGB last year the effectiveness of the chip card will dramatically reduce fraud and push con artists into the online realm. Measures have begun to address that, too.

“Biometrics are an increasingly utilized means of identifying someone at the point of purchase regardless of online, mobile or card-present,” Pappano indicates. “Thumbprint and retinal scans ensure an even higher level of authentication prior to authorizing a transaction, and the networks continue on the adoption of these technologies. And biometrics enhance the customer experience as well, since it is far simpler for a customer to scan their thumbprint than to remember their user ID and password.

“We see the industry continuing to adopt these and other new innovations to make customer transactions more seamless at the point of interaction, whether it’s on a mobile device, at the point of sale or on a PC-based system.”

Vantiv and Las Vegas-based Sightline Payments recently introduced a loyalty card at Mohegan Sun, a major casino power. Pappano says the willingness of Mohegan Sun to implement this innovation pulls the entire industry forward.

“The adoption of cashless solutions is not an easy step for an industry which still relies very heavily on cash for 95 percent of its gaming transactions,” he says. “Mohegan Sun is at the forefront of an entire industry evolution toward safe, secure, technology-driven gaming transactions.

“Vantiv’s passion and drive is to simplify payment innovation. Our relationship with Mohegan Sun and Sightline Payments exemplifies just that.”

Success is in the Cards

Omer Sattar, co-founder and executive vice president of strategic initiatives for Sightline Payments, has long been ahead of the gaming-financial institutions curve. He is, in some respects, a card shark. A couple years back, Sattar introduced Sightline’s Loyalty Plus Card, enabling casinos to reward patrons both in their property and at nearby stores. He recently unfurled the use of a card, backed by a bank, as a major breakthrough in Nevada sports books.

For Sattar, the casino-property floor is only one source of funds, despite being the original player in this lineup.

“The term ‘cash access’ is interesting in that it doesn’t apply anywhere outside the casino industry, really,” he says. “When you tell people in the casino industry that you do cash access services, they know exactly what that means. If one goes to a payments show and uses the term ‘cash access services,’ they would say, ‘Wait, what are you talking about? What does that mean?’”

“The world is changing, so we think that the term ‘cash access’ itself is something that, over time, will fade out of existence. And it all becomes about the user experience—how does the user interact with the game in the most frictionless way possible? How does the user experience the casino resort, even outside of gaming, in the most frictionless way possible?”

Sattar adds that cash will still be involved in casinos for some time, but change is imminent. The methods by which one obtains funds, however, may appear limitless.

“It will include more mobile, it will include more innovative ways of getting your money into a table game or into a slot device or, quite frankly, using a mobile device for all activity,” Sattar indicates. “Even the term ‘cashless,’ in and of itself, is not the best term. It’s about creating the best consumer experience across gaming and non-gaming for patrons of gaming entertainment facilities, and it just so happens that cash is not the best consumer experience. So over time, there will be less cash used at casinos, just as cash usage has decreased in the broader economy.”

Like Pappano, Sattar hails security advancements. They are the backbone of his innovations. And while fraud may be headed online, gaming does not have to be victimized, he asserts.

“Generally speaking, the fraud will gravitate to the path of least resistance,” he says. “It’s water flowing downhill. Internet gaming is definitely not like water flowing down a hill. It’s easier for me to buy a stolen credit card off of some hacker website and try to shop online for regular merchandise where I don’t have to give detailed information to engage, such as my Social Security number. It’s a good question to ask: If brick-and-mortar fraud becomes more difficult to commit because of EMV, will it automatically move to iGaming? I don’t think that’s what we’ve seen and I don’t think that’s what we will see. Fraud may move online, but iGaming is not the path of least resistance. That being said, there is no room for complacency, ever, when it comes to fraud, and one always needs to be vigilant.”

On the Money

Las Vegas-based DiTronics, which annually processes nearly $3 billion through its cash access systems, has nearly tripled its revenues since August 2013, according to Jim Kirner, its senior vice president of sales and marketing.

DiTronics’ latest product, the DFS 500, increases the speed, durability and functionality of casino kiosks and continues to gain new installs.

Amid the industry’s rush for “new and improved,” DiTronics installed a security measure this year. It had written the codes and field-tested software to make kiosks EMV-compliant well before the deadline, Kirner says. A casino buying a new kiosk will have the security measures already implemented. Customers who purchased the DFS 500 within the last year most likely have EMV compatibility installed and have obtained software through DiTronics, he adds. A small number of properties will opt out of ATM functionality because they would be upgrading older equipment and don’t want to buy new products.

Kirner says concern expressed by operators over EMV fraud liability has receded over time. Vendors in general have removed the fears by advancing their software.

`With one concern tackled, DiTronics poises for an imminent rollout, ATM Express. It is the first phase of customer identification for targeting offers. If a casino customer has given operators permission to link a bank or credit card to a player-identification profile, that patron can obtain a benefit at the ATM. The gambler can receive discounts based on tier loyalty. Phase 2, enabling that operator to craft marketing offers to the player, will likely be deployed in the next several months.

“The biggest trend we’re seeing from operators is the question of how much promotion is too much promotion,” Kirner says. “Casinos are trying to guard against over-marketing. It’s not that aggressive marketing is a bad thing, but things have gotten so competitive out there that at some point they are wondering if they are overspending, whether they are reinvesting too much and where that fine line is.

“Think about what the casino general manager is concerned about,” Kirner adds. “That person wonders, ‘Am I doing everything I can to attract customers?’ There are numerous offers out there. Is that person’s property over-incentivizing people? While the operator wants to provide great customer service, at what point with the free play is the property not getting what they intended out of an offer?

“We give the operators a chance to know what their customers’ wallet looks like based around actual financial transactions. They are going to know what that player is spending. If the customer took $200 out and put $100 into play, how do they capture the remaining $100? You can market to that player more effectively with this type of information.”

The innovation enhances the impact offered by DFS 500, which offers versatility. Transaction Rewards integrates funds access with a casino’s player database to provide customized fee structures by player ranking as well as the ability to award players points for completing their transactions at your casino.

Smart Dispense reduces wear-and-tear on the kiosk and improves the player experience, all while reducing the cash in all kiosks across the casino. Jackpot Pay eliminates the need for jackpot dispense units and making some or all of your kiosks able to dispense jackpots.

DFS-500 features also include a dual bill validator, with multiple ticket pay-off capability of up to 10 tickets at the same time. It’s bill-holding capacity of five cassettes/3,000 notes each reduces the need to refill cassettes during busy times, and features a 17-inch touch-screen and multi-color LED illumination, Kirner says.

As cash-access technology in the casino industry continues to advance, operators become more secure—and patrons easily obtain the funds needed to drive the business.

Casino Connection Sports Editor Dave Bontempo is an award-winning sports writer and broadcaster who calls boxing matches all over the world. He has covered the Philadelphia Flyers in the playoffs, as well as numerous PGA, LPGA and Seniors Golf Tour events, and co-hosted the Casino Connection television program with Publisher Roger Gros.

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