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Countering the Counterfeits

Why bill acceptors are the first line of defense at change machines and slots

Countering the Counterfeits

Perpetual job security marks the counterfeit detection business.

Gaming finds itself immersed in the larger-world picture of espionage, theft protection, heroes and villains. Volume alone dictates the turbulent scenario: about $2 billion in dollars and euros are wagered each day in the United States and Europe alone, according to Japan Cash Management, which provides systems solutions for the gaming, banking, kiosk and vending industries.

It is no surprise, therefore, that the U.S. Secret Service seizes about 30,000 counterfeit bills each month from Las Vegas casinos. Or that the Association of Certified Fraud Examiners, in a 2012 report, determined that a typical organization loses 5 percent of its revenue to fraud each year, mostly from within. The median setback was $140,000, and more than one-fifth of the 1,388 cases involved losses of more than $1 million. While the report targeted 94 countries and did not quantify gaming, it concluded that worldwide fraud could cost businesses $3.5 trillion per year. That number alone is large enough for casinos to protect themselves both from internal theft and outward invasion.

A principle emerges, according to the report: bigger properties suffer fewer losses, presumably by investing in high-tech counter-measures.

The Ground Game

Game on, unfortunately, between the forces of good and evil.

“The issue with counterfeit is that it is an evolving process, a punch/counter punch situation,” says Bob Gibson, vice president and director of domestic branch operations for Cummins Allison, which provides currency counters in the financial, retail, gaming, vending, law enforcement and government markets. “Everybody makes their ongoing effort to enhance performance, and as vendors come up with better technology, those who will perpetuate the fraud have incentive to try and defeat it.”

The combatants exchange haymakers. Companies produce the newest technology, thieves eventually compromise it. Companies re-arm, even install open-ended applications for future use, and the criminal element attacks that. The cycle produces an intense, yet nearly invisible arms race between legitimate businesses and the felons of counterfeiting. Invisible because gaming properties don’t want to disturb customers by apprehending thieves on the spot.

The Cold War scenario includes $100 super notes, what some consider an attack on United States currency. Unlike most of the world’s counterfeit currency, which is printed on offset presses or through digital processes, super notes are printed on the same intaglio press used by the Bureau of Engraving and Printing. The result is raised printing that ordinary counterfeits can’t duplicate. Super notes have the same look and feel as a U.S. $100 bill.

First Line of Defense

Casinos are aware that they likely process the most $100 bills in the world. They address the problem through companies like JCM, MEI, Cummins Allison and Crane Payment Solutions, which develop products to thwart counterfeiters. These companies and others work closely with governments to match their upgrades to the anticipated look of new bills, like the next United States $100 note, scheduled to debut next year.

The upgraded bill validators are sleek, sharp and sophisticated. They detect thousands of triggers in a couple of seconds before allowing a bill through the cage or a slot machine. Safety is combined with business expedience: a jammed validator machine causes a delay and lost business. These products must be practically flawless.

The technical advancements coincide with good, old-fashioned human intelligence. Take the case of an attempted 2012 theft at Spirit Mountain Casino in Oregon. A sharp employee, noticing something irregular about a $100 bill, notified her superiors. The company monitored three individuals via surveillance for several hours, even allowed them to pass more fake $100 bills, and apprehended them just after they left the casino’s parking lot. The suspects had passed 17 counterfeit bills, had 11 in their possession and 19 more in the vehicle. The men face felony charges.

What if they had escaped? Multiply the fake bills with a hot streak and casinos could be pummeled for at least six figures with every occurrence.

Unlike other technology advancements, counterfeit-fighting devices don’t threaten employee jobs. They help everybody win.

JCM Cashes In Big Decision

JCM Global is known for innovative and award-winning products that help make automated cash transactions more secure. The Osaka, Japan-based company is well-run, carries little or no debt and fashions a meticulous decision-making process.

Thank goodness for that, according to Tom Nieman, JCM senior vice president of global marketing. Nieman recalls a critical 2008 decision JCM made during the height of the Great Recession. It emerged from a three-day meeting with a contrarian idea: invest heavily while most businesses cut expenses.

What guts. As the worst economy in 90 years ran for cover, JCM gambled on its eventual return. The company thus became positioned once casinos decided to upgrade their security measures.

Result from that summit? A multimillion-dollar investment in what became iVizion, a state-of-the-art, yet upgradable device placed inside slot machines. It debuted at Hard Rock in Las Vegas in 2011 and became part of both Maryland Live! and New World Resorts in 2012. JCM’s next upgrade, Dynamic Network Applications (DNA), is set for demonstration early in 2013 and will not only detect counterfeit bills but gain an image of the person attempting to use them.

Nieman credits the company’s deliberate reasoning for making a correct industry forecast. Companies will eventually prosper and seek to protect what they’ve earned via technology, he says.

“When I look back at that, I think , ‘Boy, am I glad we made the decision we did,'” Nieman says. “They were tough times in a tough business, but we benefitted from the ultra-conservative Japanese culture, which plays into the decision-making process. They don’t think simply about one quarter, like many American companies would. They think in five-year terms, even 10 years. The company filled the room with so many people, including a good number of senior executives, and they kept deliberating until they moved toward consensus.

“At different points, you could have argued either side of the debate. It was a tough decision to make, and there was nobody in the room who said, ‘Thank you for your input and now we are going to do it this way.'”

Two major factors swayed the debate. One, the company had no debt. Two, the “room” decided that operators will eventually spend money, even in this economy. When casinos do spend, they may opt for companies that have invested for the moment.

“What came out of it was that if you believed gaming was going to come back, we were going to make our next product feature-rich rather than a couple dollars cheaper than a competitor,” Nieman says. “Rather than say we were going to cut money from the cost, we could say we were doing something with the product that had never been done before.

“That was an important commitment for us, because everybody was budget-cutting. You normally had been able to count on 12-14 percent of your machines needing some sort of replacement every year, but now you were down to 2 percent.”

The iVizion bill validator, 12-14 inches tall, fits inside the machine with an array of components. That includes contact image sensors (CIS) which, at 85 millimeters wide, can capture all world currency at 100 percent, according to company reports. It is self-calibrating and has a sealed banknote path with dirt- and liquid-resistant design, resulting in less service-related down time.

It reads at 2.7 notes per second, and optically centers banknotes, which eliminates the need for mechanical centering.

The device also has high-level anti-stringing technology. Thieves have used the string concept to put a legitimate bill in a validator, have credits counted, and pull the bill back out, a practice eliminated by this product.

iVizion has helped casinos to validate bills more quickly. It enabled Hollywood Casino Toledo and Horseshoe in Cleveland to process more than $1 billion in a three-month period earlier this year.

Dynamic Network Applications sits on top of the iVizion, and will be available either as a new purchase or an upgrade from iVizion next year.

MEI Advances

MEI Group is already known for its bill-validating presence in industries ranging from grocery store check-out counters to subway systems. It handles 2 billion transactions a week, according to Eric Fisher, its senior vice president for the Americas. Ten years ago, MEI brought its Cashflow SC product into gaming, and in 2012 it upgraded. Casinos can either utilize Cashflow SC or upgrade to the new SC Advance, which, among other things, essentially doubles the amount of bills that can be processed.

The West Chester, Pennsylvania-based company, which uses Las Vegas as a gaming headquarters and has extensive contracts throughout Canada, also capitalized on the expansion of Atlantic City. It gained an important stake in the future by securing a significant 2012 deal with Revel, involving more than 2,000 machines. MEI expects a robust 2013 as its new SC Advance System merges with an expected surge in slot-machine replacement.

“We believe that what separates us from competition is not only what we look for, but how we look at it,” Fisher says. “We don’t just take a picture of the bill, for instance; we take an X-ray. We use six wavelengths to validate the bill. We have a number of ways to identify it as a good bill or eliminate it as a bad bill.

“It is our secret sauce, a result of the efforts put in by many people, like the 100 engineers in Geneva, Switzerland who come up with these mathematical equations and risk analyses and then help give us our product.”

Fisher says SC Advance has an improved recognition system, which provides proactive security by utilizing transmissive sensors to see all the way through notes in multiple wavelengths. The SC advance also has faster note-to-note speed, which speeds up transactions. Its expanded memory allows more notes to be recognized in a specific release of firmware. The comprehensive barcode recognition feature processes barcode coupons in all four directions and improves acceptance on multi-width currencies.

Some companies, like Revel, may upgrade from Cash System to SC Advance once state regulations permit. Fisher says the change can be made easily.

Besides validating bills in nearly 100 currencies, SC Advance also works with vouchers. Fisher, whose 28-year gaming career included a director-of-marketing tenure at Mirage, understands how crucial his company’s products are.

“We are the offensive line for whomever we work for,” he says. “If we don’t do our job and the quarterback gets sacked, we lose the game. If the bill is not properly stacked and gets folded and the machine jams, you can take down the whole slot game for that jam. We are mission critical. You can have the best slot-machine game in the world, but you can’t play it if the BV (bill validator) is down.”

Fisher says MEI has never accepted a super note. “Our competitors cannot say that,” he asserts.

Cummins Allison: Scanning The Globe

Cummins Allison, headquartered near Chicago, has a worldwide presence via contracts and patents.

Its latest product line for counterfeit detection exists in three major casino areas. Several desktop devices are in the cage, where operators can run bills through to detect a counterfeit bill. Products extend to the soft count area, where high-speed sorting machines process and reconcile the contents of the bill validators. This helps operators reconcile totals with the BV boxes that come out of slot machines, and to separate tickets and currency by denominations. In the main bank, its products help keep the count for supporting multiple casino departments.

A major breakthrough for Cummins Allison occurred in 2010, according to Bob Gibson, the company’s vice president and director of branch operations. Cummins Allison’s Jet Scan iFX series found its way into more than 100 properties because it improved processing and detection over existing technology.

The industry already utilizes scan sensors to identify the true value of clip-cornered bills. The Jet Scan iFX has magnetic sensing to compare ink levels to different pre-set levels for each denomination. Florescence sensing tests each bill’s paper and stops a bill that fluoresces differently than real currency. Enhanced ultraviolet validates paper authenticity. Infrared sensors are utilized to test the printing quality of the bill, Gibson says. Cummins Allison’s IQ sensing technology, available on the newest JetScan iFX platform of products, enhances the detection technology, he says. This means advanced analytic software combines with cutting-edge sensors to catch counterfeit notes that other systems miss. It also has more features designed for future upgrades.

“On the Cummins Allison JetScan iFX platform, we are now set up to accommodate future upgrades in software, so that you can have improvements placed into the product without having to replace it,” Gibson says.

In the punch/counter-punch world of casinos and counterfeiters, Gibson believes his company threw the last haymaker.

“Because of the sensors being able to do the full document imaging, we can capture, archive and store all the bills,” he says. “Casinos can track the serial numbers of money throughout the entire property and retrieve information about it later. Also, the Jet Scan iFX is the only desktop solution on the market that can handle multiple types of documents—not only processing currency, but casino tickets and checks. We can image 400 documents a minute, for example, in the checks environment; that’s over 200 times faster than normal. We can process 1,200 tickets a minute, with the nearest competitors being anywhere from 600 to 1,000. That helps operators to balance much faster.”

Crane’s New Products

Crane Payment Solutions in West Ontario, Canada, is the parent company of the CashCode, NRI, and Money Controls branded products. As one family, it provides payment systems to 75 countries and offers an extensive range of bill and coin validators, bill recyclers and coin hoppers.

Crane Payment Solutions promotes two bill validators: the Money Controls Ardac Elite and the CashCode one.

“The Ardac Elite is the No. 1-selling bill validator in Latin America and the U.K.—hands down,” says Nishit Shah, product manager for Crane Payment Solutions. “This validator pioneered the industry’s first imaging technology with full note scanning. This image is clearly displayed on a PDA when plugged in via the front USB port.

“The CashCode One is popular in many areas of the world with its product extensions oneCheck Cash Management Solution and the 2500 Note Cashbox. It has a multiple sensor technology suitable for the world’s currency set, higher banknote memory capacity, and a singular BV head that fits all slot machines and communicates with all gaming protocols (including GDS). Most importantly, it is designed to reduce your operational cost by highly reliable mechanics and offering various sizes of cash box.”

He adds that the company is rolling with the bill validator movement.

“Our product roadmap is fully aligned with market requirements,” Shah asserts. “Last year we launched the GDS-enabled bill validator and coin validator. Prior to that we launched oneCheck with enhanced features (connectivity to all leading printer manufacturers and a database updated on operator’s feedback). We also recently developed ‘Cashconnect,’ a stand-alone bill validator solution for the Mexican market.”

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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