Five years ago, cashless gaming systems were still prototypical contraptions that seemed promising yet far-off, but no more. Today’s post-pandemic, touchless economy has made cashless the hottest commodity in the industry, and companies are popping up left and right to plant their flag and claim their niche within the payment pipeline.
Every industry has its faction of “old-school” holdouts, who favor the proven processes of the past instead of the uncertainty and volatility of newfangled apps, startups and software. Gaming is probably the chief example of this still left today—for years, high-tech minds have been looking for ways to revamp gaming floors that still feature cash, coin ops, indoor smoking and other images of times gone by.
However, the explosion of online gaming and mobile sports betting coupled with a crippling global pandemic that made cash about as undesirable as used tissues have highlighted the fact that in 2022 and beyond, operators must invest in cashless systems if they wish to keep pace with an evolving player base that favors convenience and integration more than comfy chairs and drink service.
The tide of technology has shifted in such a way that cashless payments have become a “must-have” rather than a “nice-to-have,” and there are a number of companies and suppliers who have stepped up to meet that demand; it just depends on what you’re looking for, and for how much.
As with any technology update, cashless systems require investment both in terms of capital and company buy-in (no pun intended). Indeed, the old adage that “it takes money to make money” might need to be updated to “it takes some cash to get rid of cash.” The process of transitioning to cashless will look different for each operator, depending on their existing setup and future expectations, but there’s no doubt that the timeline has been expedited substantially for all companies.
Covid’s Impact on Cashless
It feels rather insensitive to say that the advent of the Covid-19 pandemic was a boon to the cashless industry, but it’s not totally untrue, either, and those around the industry have acknowledged that impact. It forced many of the aforementioned holdouts to finally change their mindset towards the potential benefits of cashless, which is almost always the biggest hurdle to clear.
In most cases, the capital and resources are there; it’s just a matter of adoption and implementation.
International Game Technology, one of the leading names in gaming as a whole, noticed a marked shift in demand for its Resort Wallet and IGTPay cashless products when Covid hit, according to Ryan Reddy, the company’s senior vice president of global product marketing and payments.
“Before the pandemic, we were promoting cashless technologies to our IGT Advantage users, but for the last couple of years, the dynamic has shifted to an expressed interest and demand from our customers and a high priority for regulators across the U.S.,” Reddy says.
Now that the world is becoming increasingly interconnected with smartphone technology, bettors don’t want to step back in time when sitting down at their game of choice. Cashless integration is now a convenience that “many patrons expect when visiting a casino,” according to Reddy.
Earle Hall, CEO of cashless provider and data management company AXES.ai, remembers that shift vividly, and how “the planet changed” in a short period of time, especially with regards to digital services. More importantly, however, Hall noticed more operators beginning to understand the wealth of customer data that comes with cashless systems, which is actually one of their greatest strengths.
“What we saw (post-Covid) is our operators, our clients, started to become extremely data-centric,” Hall says. “Which means not only did they start to focus more on the data, but they started to look at the correlation of the performance of the machine, the placement of the machine with the needs of the customer in real time and the customer journey over time. So, we saw a major shift in what I’d like to call the client data maturity.”
Other industries, Hall says, have already embraced and utilized that data to the fullest extent—“the Facebooks of this world, the Starbucks of this world understood this years ago”—now, gaming must adapt in order to keep pace. AXES offers a number of cloud-based data management and cashless products, including its Smart Card and Voucher I/O systems. The top of its website features a simple, alleritave motto: “Cash Carries Covid—Go Cashless.”
Even gaming regulators, who are not always first in line to usher in new policy, seemed to make the shift. In August 2020, former Nevada Gaming Control Board Chairwoman Sandra Douglass Morgan remarked that with regards to cashless regulations, “Covid made everything expedite very quickly.” Morgan also added that the NGCB was “proud” of the progress that was made, and that it was happy to see more companies “embrace cashless wagering.”
The Benefits of Making the Change
It’s easy to see why a cashless transition may be difficult for an industry that’s relied on cash for decades, even from a marketing perspective—after all, the iconic motifs of Las Vegas and Atlantic City don’t usually include a smartphone or payment reader; it’s much simpler to fall back on showgirls, cocktails and jackpots with piles of moolah.
But in the age of information, the data reigns supreme, and cashless companies are putting that at the top of their sales pitch.
Acres Manufacturing is among the suppliers making the most of this technology. The company recently unveiled its long-awaited Cashless Casino app, which is advertised as being able to facilitate a full cashless transition in 15 weeks or less. The app runs through Acres’ Foundation casino management system, and is “the only hardware in the space that’s able to get casinos real-time data from their slot machines,” according to Acres Manufacturing’s Noah Acres.
Acres explains how existing casino management systems and the technology surrounding them have largely remained the same for “20 or so years,” conceived in a time when “there was no real such thing as mobile devices.”
Foundation touts universal integration across machine suppliers such as Konami, IGT and Light & Wonder, which allows operators to keep their preferred machine layout on the floor. The quicker you can get detailed player data, the easier it is to market and acquire new players, and moving forward, “operators are going to be in a much more powerful position,” because if they “know how your experience is going or how your last experience went,” and if they can keep track of “all of your transactions throughout the property, they will have a lot of information that they can now use to market to you really effectively,” says Acres.
In addition to the loftier, high-tech incentives, cashless systems also offer tangible benefits that are easy for business owners to see—the reduction of cash handling and storage costs is probably chief among them. To be clear, Reddy joins others around the industry in expecting cash to be “a part of the casino ecosystem for the foreseeable future,” but the “next five years will be marked with a tremendous spike in technology adoption,” and cash costs will become an increased burden for operators, especially as gaming expands into new markets.
“It wasn’t that long ago where it would be really rare to walk into a restaurant or some other store and they say, ‘We don’t take any cash at all,’” says Acres. “But now it’s really common. And you go to stadiums and they don’t take cash at all. So, they’re saving so much on the labor that it takes to manage and inventory that cash, and if you look at the slot machine, there’s the bill validator and the ticket printer, and then you’ve got the casino cage and the surveillance. It’s really, really expensive, especially in the casino space.”
Operating a cash-heavy business is not only expensive, it also comes with a lot of added responsibilities and regulations with regards to money laundering and problem gaming. As technology improves, weaning casinos off of cash in favor of digital alternatives actually makes them safer for both bettors and operators, in the sense that funds are more secure and problem behavior can be spotted more quickly. Almost all cashless solutions currently on the market come complete with safety features such as deposit or withdrawal limits and identification verification.
Software provider and payment processor Global Payments has highlighted these securities in its VIP Mobility platform. The system touts “reduced anti-money laundering exposure” and provides “hardened bank-grade security to casinos’ complex gaming environments for operators who might be concerned about the safety of cashless gaming,” according to Chris Justice, president of Global Payments Gaming Solutions.
“Consumers have grown accustomed to self-service and mobile-based commerce experiences, regardless of whether those experiences take place in a physical or digital space. Operators striving to remain viable must implement solutions that create the alternative, cashless experience that many patrons now prefer,” and that includes the requisite safety and security features that are seen across non-gaming payment systems and online banking.
IGT offers similar safeguards in its Resort Wallet and IGTPay systems, including face and fingerprint biometrics, and multiple password controls. Bettors’ accounts are also PIN-protected, and accounts cannot be made “without meeting rigid verification of identification requirements,” Reddy says.
Digital Brass Tacks
So, if cashless continues to become an obligation rather than a luxury for operators, the next most important question then becomes the costs and investments involved.
A cashless transition is truly a foundational shift that requires both financial and institutional commitment, including hardware swaps, technology upgrades, employee training, and marketing changes.
Some of these requirements are simple—for existing IGT clients, for example, “introducing cashless gaming via Resort Wallet and IGTPay is merely a system upgrade,” Reddy says. Other systems, according to Justice, may require “additional technology certifications on the casino floor” or “expensive casino floor network upgrades,” which “can be an unanticipated cost” for operators just starting their cashless journey.
Technically speaking, all companies need to have three components in order to go sans-cash, according to Acres: “the ability to change the credit meter on a slot machine, a user interface for the players to conduct the transactions over, and a payment processor.” Thus, the properties that have already started to migrate towards new tech systems will have a better starting point from which to launch, as opposed to the down-home local casinos that will have a much more difficult and expensive transformation.
In-house training and implementation also is a key factor, because if your staff isn’t dialed in on the technology at hand, chances are the overserved tourists and picky locals won’t be either.
“Any time an operator asks a patron to alter his or her behavior and try a new technology, there is a ramp-up period,” says Reddy. “From our experience, employee training and on-floor ambassadors have helped fuel player adoption.”
Once the hardware is paid for, the software is downloaded and the training is conducted, the next requirement is a change in marketing, which can be the toughest of all, especially when the previous images of casino lore have worked so well for so long. For Hall and AXES, this is the most important step of the process by far.
“It’s not about going to the ATM machine or just pulling money out of your bank accounts and funding an app,” Hall says. “It’s more about how you get them to leave their old behavior and adopt a new behavior. And they need to either gain something or be scared of losing something… So, the only thing that they have to prepare for is their marketing plan.
“The plan has to say, ‘You have this player’s club that you’ve always been in, you’re Silver. But if you migrate to the app, you automatically become Gold,’ and let’s see a goal for three months. Take Marriott—when they converted me from Hilton to Marriott, they gave me Platinum right away for three months and said, ‘Hey, if you stay X number of nights for the next three months, you will be Platinum for the next year.’ So they were using a positive strategy. You can use positive or negative, but the only way to get them to change is you’ve got to have a marketing plan.”
Now that smartphones outnumber people and social media constitutes the new zeitgeist, operators will need to evolve from cash and direct mail to fintech and digital promotions in order to keep their place in a hierarchy that now includes startups, Silicon Valley types and loads of foreign interest.
After all, it only takes so long before old-school nostalgia becomes obsolete and defunct.