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Changing Cash

ATMs and other cash-handling equipment step up their technological evolution

Changing Cash

When the economic recovery train rolls into the station, technology will not merely board for the next trip segment. It may be a conductor.

Gaming facilities use upgraded technical tools to dramatically enhance their all-important cash-access products line. From multi-purpose ATMs to gaming-floor kiosks, three-in-one functionality to outstanding tracking ability, the art of dispensing cash is a high-tech phenomenon.

Unlike many businesses, cash access services don’t have to leave segments of their operations behind as they upgrade technically. ATMs are more functional, for instance, but still must be basic, dependable, instant sources of cash. Casinos may want more panache in their ATMs, hence the presence of kiosks on the floor, but they still want to pocket millions of transaction fees from the machines every year.

And yes, ticket-in/ticket-out creates a cashless, faster, more profitable game for casinos, but the presence of cash remains. It’s just in a different form—a checking account balance linked to a kiosk facility.

Much of this has happened recently.

“More than half the products we have rolled out did not exist for us three years ago,” says Scott Betts, president and CEO of ATM powerhouse Global Cash Access. “We need to keep satisfying the customer and helping the casinos keep cash on the floor.”

They have. And so have others.

Even in a sputtering economy, customers have benefited from the innovation age of cash access service. Properties also participate via state-of-the-art advancements like Casino Share Intelligence (CSI), a revolutionary method for tracking player spending, developed by GCA.

The industry, in general, is investing ahead of an anticipated economic recovery. Even if that end develops slowly, businesses see the need to remain sharp. They use some of tomorrow’s technology today, but know that the industry always wants innovations yesterday.

Global Gaming Business analyzed three successful companies with different ties to the casino cash access age. Sturdy, dependable U.S. Bank champions volume. It has a whopping $1.6 billion tied up in the nation’s machines. To service the gaming industry, it upgrades primarily for defensive purposes. Its claim to fame could be preventing expensive down-time at an ATM or kiosk. Its needs ensure against delays caused by failed transactions.

Toronto-based NTR boldly took the kiosk age into Macau, the Mecca of gaming, in early spring. Imagine scoring with a new product in a market 10 times the size of Las Vegas.

Global Cash Access is the leader in its industry, unfurling new products at impressive speed. Expect the company’s CSI system to grow like wildfire as casinos decide they can’t live without it.

Optimal Solutions

GCA is a global leader in providing tightly integrated solutions to the gaming industry by optimizing the cash access process.

The services allow gamblers to access cash through methods that include ATM withdrawals, credit card cash access transactions, point-of-sale debit card transactions, check verification, warranty services and money transfers. GCA also sells full-service kiosks and service cash access devices like redemption jackpot kiosks to the industry.

GCA controls roughly 70 percent of the cash access service market, according to Betts. That translates into some significant business. GCA produces over $35,000 in transactions per minute from over 8,000 patron touch points around the globe. The company has over 90 million transactions annually, with over $19 billion in cash dispensed last year. It is licensed in over 350 jurisdictions, serves over 1,100 casinos globally and has a database of more than 14 million unique patrons.

GCA has long been a leader in a business that spans several evolution phases. Cash access began as one person putting a bank card into an ATM to generate cash. It evolved into full-service kiosks, with cash access services linked to redemption devices and providing information services.

Its newest hot product, Casino Share Intelligence, has become a significant marketing aid for those who subscribe, and may become a mandatory tool for properties seeking the smallest edge. CSI eliminates the myopic view from a property level and provides a broader look at a property’s true market share.

But before that happens, customers need to be able to obtain cash on demand.

“We know that 60 percent of the money on the casino floor doesn’t walk into the property,” Betts says. “It comes from devices on the casino floor. It is a critical process both for us and the casinos to keep up with the electronic payments world, whether that means ATM cash, credit cards, debit cards or electronic checks. It is also important for us to connect our cash access solution onto redemption devices, like the full-service kiosk.”

Those devices now have picture-in-picture technology, allowing properties to advertise promotional deals or offer last-minute show tickets on the kiosks. GCA has the only industry device with a 22-inch screen that mirrors the size of a slot machine.

Another significant innovation is “3-in-1 Rollover” technology. This addresses a cash shortage players sometimes encounter on weekends. Most banks treat Friday through Sunday as one day on an ATM, capping weekend transactions at its one-day limit. If a player gets shut out for funds, 3-in-1 allows a point-of-sale or casino cage transaction to occur.

And the device it operates on is sleek.

The full-service kiosks present patrons with options that include exchanging slot vouchers for cash, breaking large bills or exchanging points for cash and coupons. They also come with available ATM withdrawal, POS debit card, and credit card cash advance capability.

According to Betts, the machines conform to a significant industry standard. They deny a problem gambler who has voluntary opted out from obtaining funds on the gaming floor.

CSI: Not a TV Show

Casino Share Intelligence, rolled out 10 months ago, has become one of the industry’s most prominent breakthroughs ever. If gaming competition was an arms race, this item is a nuke.

“It really is a game-changer for the industry,” Betts laughs about an innovation that figures to revolutionize the way data is assembled and applied by casinos pitching customer promotions. “While casinos spend so much money and focus on what a player does inside the casino, they are blind as to what happens in the marketplace. CSI is a tool that enables you to identify a population of people, tell you what the behavior pattern is of that population and allow you to analyze information going back a couple of years.”

Here’s how it works:

Casinos subscribe to the web-based product. CSI uses its data, obtained from payment transactions at all its properties, by use of debit cards, credit cards, check cashing and ATM cards. For a subscribed property, CSI tracks its players’ withdrawals, and patterns emerge. The trends are highlighted in spreadsheet form, providing the casino with a true measure of share, loyalty and trail. CSI hits several key areas:

• Market share: The percentage of all GCA patron withdrawal dollars at one casino compared to dollars withdrawn in one’s competitive market—depicted in a convenient heat map format.

• Patron share: The percentage of all GCA patrons that made at least one withdrawal at a property compared to the number of patrons in their competitors’ market.

• Wallet share: For those patrons that visited a casino and have at least one withdrawal, this determines what percentage of patrons’ total wallet a casino captures. CSI offers a variety of patron filters—including value, age and distance—to refine results. This enables a property to identify shifts in share and thus take immediate action.

Uses for the data are endless. A property can zero in on a heavily populated area and track whether a promotion succeeded. “Our database becomes a product that truly helps marketing departments,” Betts says. “If they subscribe, we give them a chance at slicing and dicing the data. A property manager could say, ‘Over this last weekend, when I did a mass mailer, did I really grow our share? What is my share of wallet? What is my true loyalty? Did I actually get people to visit my casino?’ This tool provides a snapshot of the player’s loyalty.”

It may also outline the world of “Player Promiscuity,” a term coined by Caesars Entertainment CEO Gary Loveman, to indicate that the biggest players have the least loyalty to one property.

That reality, coupled with CSI, creates a potential gold mine for any property that would gain a slice of the big player’s action.

Tracking provides proof as to how gamblers spend, and enables a casino to determine how much that customer is spending, even if it’s at the property of a competitor. This gives marketing, slot, host and player development personnel data by which to formulate policy. It expands the marketing sophistication from “Mr. X’s play is down lately” to “Look where he went; let’s get him back.”

Here is another wallet-share scenario. Jane lives 26 miles away and withdrew $300,000 last year. Only a small percentage occurred at a particular property. Conclusion? Jane is a high-potential, low wallet-share gambler. Strategy? Reel her in for big rewards. Marketing her has no downside, because the property has little business with her now. Anything derived from marketing Jane will be considered a bonus.

Keeping it Rolling

In the frenzied world of ticket-in/ticket-out, faster play, tracking, multi-player electronic games and instantaneous access, U.S. Bank is a steady hand. Consider it a mutual fund, perhaps, in a gaming world filled with stock-market-like volatility.

U.S. Bank reduces expensive down-time in the ATM world. Sound, basic cash dispensing capability remains its major presence in the gaming industry.

“We are the transaction processing technology of the machine,” says Paul Nielsen, managing director for U.S. Bank Gaming Services. “We are what enables that machine to deliver cash to the floor to the guests. That’s so important because roughly two-thirds of all the cash on the casino floor comes from the ATMs. They have to be operating.

“We pride ourselves on delivering more cash to the floor than the same device of our competition.”

U.S Bank utilizes a technology platform with customized links to networks like Visa and MasterCard. The system anticipates simultaneous information requests from institutions tied to the cards used in the ATM. It sets up alternate routing methods, in the same manner a computer frees up space to avoid seizing up.

U.S. Bank services roughly 200 casinos via an estimated 1,300 ATMs and ATM-enabled kiosks. It owns two-thirds of the equipment it supplies to the casinos. The properties own the other third, and that percentage is rising. Nielsen says that’s win-win, because U.S. Bank manages about $1.6 billion tied up in ATMs, which produce little or no revenue. Casinos that own their own machines have direct oversight if there is a problem.

Unlike company machines that track spending patterns and perhaps what a customer ate for breakfast, U.S. Bank ATMs deliver cold, hard cash to players. When they need it. Which is always… now.

“Collisions can occur with so many transactions going in and out,” Nielsen says. “With all these messages coming through the communications pipeline, they don’t always reach the processor. A decline could occur for the cardholder for many different reasons. You want a customized way to eliminate those collisions and get a higher rate of funds approval for the transaction and the cash it dispenses.

“For six years in a row, U.S . Bank has received the Visa Award for the highest authorization approval rating among its peers. In the gaming business, that means more cash to the floor.”

Cash is indeed king, as long as it flows freely.

“Roughly 30 percent of all transactions in the casino industry are declined,” Nielsen indicates. “It can happen for several reasons. Let’s say you can’t remember your PIN, or your key is wrong, or perhaps your account does not have enough funds.

“A fairly large percentage of declines occur simply because a customer put in the wrong PIN. Our technology allows for the re-trying of the PIN, and about 25 percent of the time that will provide the funds to be released.

“That is significant, because in a large casino operation that has maybe $100 million dispensed in cash via ATMs every year, we can lift the percentage of their successful cash dispensing by several percent. That’s about $5 million more in cash to the floor. With a typical 7 percent industry hold, that’s an extra $350,000 in gaming revenue. That’s big. That’s just good technology.”

And that’s conservative. Bank officials tend to promote lower numbers that occur consistently rather than high ones that occur occasionally. Nielsen acknowledges that higher authorization rates and PIN re-tries may even create a 10-15 percent “lift.” A 15 percent lift in this example creates additional $1 million in revenue, with the 7 percent industry hold.

Even mutual funds, however, contain an element of pizzazz. For U.S. Bank, that means a growing number of machines that combine cash access redemption capabilities into a single kiosk. U.S. Bank added electronic checks to the world of 3-in-1 ATM operations—essentially turning them into “4-in-1” units.

Electronic checks mirror a nuance in the customer-casino relationship, via banking. This check guarantee enables a guest to access his checking account with a two-day wait time before the funds are debited.

“A guest who enrolls as a VIP can get a special card,” Nielsen says. “It looks like an ATM card and it works at ATMs and kiosks. You do the transaction and the funds are not debited until two days later. There are some customers who simply don’t want the funds taken out now, but they want to play. About 100 casinos that we deal with have this service. It helps lift the cash to the floor even further.”

The added utilization of ATMs reflects the wish of casinos to monitor their players’ spending functions. It begins by offering them cash, points and instant availability.

A Slice of Macau

Toronto-based NRT Technology Corp., meanwhile, made a prominent showcase of its Quick Jack 2 Kiosk Solution (right) at the grand opening of Macau’s newest casino, Sands Cotai Central, in April.

The versatile cash-handling kiosks provide casino patrons with easy, fast and reliable means to redeem slot machine tickets, break bills and conduct ATM transactions. Behind the scenes, NRT’s QJ2 Cash Handling System (CHS) provides casino staff with sophisticated tools to capture, manage and report on both the transactional activity and the “health” of the machines.

That’s the logical evolution of cash-handling services and a significant gaming tool for Macau, gaming’s 800-pound gorilla. It dwarfs the worldwide market with whopping $56 billion annual revenue, 10 times more than American kingpin Las Vegas. NRT products are deployed in most major casinos in Macau, including Sands-Venetian, Wynn, Mocha Clubs, City of Dreams, MGM, Galaxy Starworld and Grand Emperor.

NRT is a recognized global leader for cash-handling kiosk solutions in the gaming industry. Its chief executive hopes there has never been a better time—now—nor a better place—lucrative Macau—to make a product splash.

“There is always the need for innovation,” says John Dominelli, the founder of NRT. “We have to be right about this when we develop the technology. We are in a multibillion-dollar business. What we unveiled in Macau was primarily about redeeming TITO tickets, vouchers, bill break, promos and comp redemption. We can expedite that whole process for the casino and keep cash coming to the floor, but we are also giving the casino a whole lot more ability to see where the cash is being spent.”

Dominelli says his owner-operator status expedites technological breakthroughs. Layers of decision-making are eliminated.

“Our company owns the ATM software,” he says. “If there is a need to make a switch in something, we go to work. There is no third party to go to. There is no need to write a statement about the work, agree on a price, a schedule, testing specifications, etc. Normally, there are a lot of bottlenecks in this process, but we can address that quickly, and it is a huge edge.”

Especially in this culture. Speed and convenience are critical. Dominelli says NRT has 450 worldwide casino clients, prompting a new array of services.

“One of the ideas we are close to implementing will be even better for casinos,” he says. “This will consolidate all the touch points on where the money is. Right now if you ask the properties how much money they have on the floor, they will say, ‘I can tell you at the end of the month.’

“What we have coming will consolidate all these touch points for them. It will incorporate cash registers, cashiers, ATMs, etc. You will be able to spot that perhaps $300,000 in cash has been sitting idly in one machine for three days, and now maybe it’s time to put that to better use. The whole idea is to reduce the amount of money required for casinos to run the business.”

Gas and Gambling

Within the next few months, the following phrase may be uttered: “Fill it up and give me the Lakers minus 8.”

Kiosk technology will spread substantially throughout Las Vegas, Dominelli predicts. It will grow to allow full gaming, including sports book action, at gas stations. This includes ticket-in/ticket out, loyalty card, debit card and cash accommodations. Forget the long lines at a sports book.

Take the gas, give the points.

The journeys of these companies illustrate both the opportunity and the urgency prevalent in their business. Companies must invest in their technological infrastructure, regardless of the economy, and expect it to follow suit.

History has told them that it will.

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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