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Getting Smart

Smart-card technology matures as the U.S. market grows for new types of gambling tailor-made for the payment method

Getting Smart

Innovative genius launched and still drives the gaming world. But being “smart” has never been more important.

The lucrative American gaming market samples a smash overseas hit. Smart cards, already used extensively in financial and health industries throughout Europe, flow more freely through the American casino world. Expanded card use elicits euphoria between the gaming and non-gaming entities linked by them.

Optimism also remains for the reverse of iGaming’s slow growth, which would prompt a smart-card proliferation.

There are detours, however. Data-breach reports pack sobering reminders of hacking threats. So does cautious government policy, like the industry-friendly Nevada Gaming Control Board warily approaching online legalization because of security fears.

The latest example was its October ruling that daily fantasy sports is a form of gambling requiring a state license to operate. Underscoring the judgment were four player lawsuits claiming the equivalent of insider trading against the DraftKings and FanDuel websites.

The Nevada Control Board moves deliberately, and if its influential stature affects other states, smart cards will lose one of their rising markets in fantasy sports.

While these scenarios play out, much adieu surrounds the the card, which resembles a credit card in size and shape, but is different. The inside of the smart card usually contains an embedded microprocessor, replacing the standard magnetic stripe on a credit or debit card. These financial instruments  are more popular in Europe than in the United States. Yet, when the American market starts embracing something, industries rush toward them.

In this case, the industries are gaming and credit-card companies.

Welcome to the stampede.

Sightline: A Good Vision

Omer Sattar has long championed card use by casino properties. The co-founder and executive vice president of strategic initiatives for Las-Vegas-based Sightline Payments literally had company eyes on the prize.

His group brought a significant component to the gaming-world table a couple years ago via Loyalty Card Plus, a unique reloadable prepaid card program designed for casino operators.

Vantiv, Bally Technologies and Discover partnered with Sightline back then, and properties continue to sign up.

“A casino issues you a card and you can take that card and use it at any retail location,” Sattar says. “The same card is tied into all of the casino’s systems—slot systems, TITO, machines and table game management systems. I can ultimately sit at a slot machine and put in a player loyalty card, and it asks how much money I’d like to use.

“From that same card, I can buy in without putting cash into the machine. Instead of hitting cash-out or using TITO, that money gets put back on the card. This is the first time something like this is being done, where a casino-granted card lets you play in a casino and spend money anywhere you want. It does so in a secure fashion. Cards are FDIC-insured, and carry lost/stolen protection (with Reg E). From a customer standpoint, the convenience factor is huge.”

From the casino perspective, this system removes cash, Sattar says. It eliminates the issue of money being expensive to manage, procure and deposit at a bank.

“One of the applications we offer is designed for when customers hit jackpots at a casino,” Sattar indicates. “There is a major security concern around jackpots being paid in cash because you can be followed out of a casino and then be assaulted. Now, money is going on a piece of plastic. If it is stolen, it is basically useless to them.”

Customer preferences can also be targeted, and marketed to. Frequent flier points? Sort of.

“We have created an ecosystem that replicates how airline rewards work,” Sattar explains. “When I take a casino card and pay for a steak at a steakhouse—any steakhouse, not just one that is on the casino property—I can now get casino points. Customers who are loyal to various brands are now earning points for their next casino visit. This program is zero dollars out of the pockets of casinos; it is a free marketing tool that incentivizes customers.

“Not only does a casino now know that I like steak, but where I like to go and when I like to have it. Rather than a blanket offer next time, as a casino, we now give you a targeted offer built around eating steak.”

The Sightline footprint has been pronounced, Sattar contends. It spreads across several entities. “We work with brick-and-mortar, iGaming, parimutuel, ADW, and race and sports,” he says. “We’ve  been live for over two years and have seen some really interesting data points from the casino standpoint. In iGaming, operators found that those who have signed up for the card, when compared to customers who bring in money from other mechanisms, are much more loyal.

“When you give a customer something they can hold in their hand that has their name on it, it fosters great loyalty. From what we have seen with the cards, there is heavy usage, and cards staying active for a  long amount of time. If you also give customers the convenience of using gaming technology on mobile or at home, with their name on it… and they can buy groceries using the same technology, it’s pretty obvious that they will use it.”

The process incorporates both convenience and loyalty, Sattar asserts. The more it unfolds, the better chance it will become second nature.

“Separately, this ties in to existing loyalty systems,” he says. “We don’t want them to be changed out, as they have been built over a long period of time. When someone wants the prepaid card, we simply attach it to the existing casino loyalty program. We can feed all that data back in to existing loyalty systems. We don’t want casinos to have heavy infrastructure costs in replacing what they have. Our goal is to have a major casino company on board with as little cost as possible. Loyalty cards will and should maintain a presence in this industry, even with the convergence of mobile and other payment solutions. Payments should tie to loyalty and drive loyalty, not replace loyalty.”

Vantiv: Natural Tie to Sightline

The success of Sightline played into the Vantiv lineup.

Cincinnati-based Vantiv brought a high-profile reputation into the gaming world a few years ago. It handles more than $800 billon from 23 billion transactions and services from companies such as retail giants Wal Mart and CVS, among others. Vantiv provides the connectivity for anyone using a card to fund gaming purchases.

Two years ago, it created Vantiv Gaming Solutions, now Vantiv Entertainment Solutions, reflecting the company’s intent to help casinos, iGaming, lottery and social gaming operators build strategic pay programs. Vantiv has obtained an ownership interest and partnership with Sightline.

“When we studied the gaming industry and looked at what our ultimate goal was—the convergence of gaming and payments coming together—the innovative technology that Sightline was building and the bidirectional network as it relates to cashless gaming worked for us,” says Joe Pappano, senior vice president and managing director of Vantiv Entertainment Solutions. “We wanted to invest in that technology. At Vantiv, we have 40 years in the payments industry. We knew that because of our credibility, industry expertise and assets, we could help take the Sightline offering and enhance and build out technologies that existed.

“More importantly, our partnership became a critical piece in driving a unified customer experience. Collectively, we knew we could help drive significant change and revenue growth. (Sightline) needed a strong partner that was committed to the gaming industry, and that’s what we are. We are positioned well to provide a one-stop shop for an operator and any other entities in the gaming ecosystem.”

Pappano says the card’s original business model was predicated on removing cash from of the casino floor, knowing it is the largest operating expense for casinos. An added benefit is that it is  being tied to rewards programs and different wallets. The utility of the card is expanding dramatically because of innovation, and this utility is future-proof, he says.

That’s why security must be foolproof. Given significant industry growth and data breeches involving businesses, security concerns remain paramount. It is one of the biggest obstacles vendors face in all industries.

“The card itself is issued by a financial institution, and adheres to regulatory oversight,” Pappano says. “It is FDIC-insured, and it does come with Reg E protection. What that means is that the consumer is not liable for lost or stolen cards, just like their traditional debit and credit cards. In addition, the funds are held by a bank. We’re not reinventing consumer protection with this, and it fits within the governance that’s inherent in the financial industry. Two highly regulated industries are coming together here, and the program is built on protecting consumers.”

Casinos and traditional non-gaming entities are becoming one. Many properties, especially tribal casinos, use shopping venues like Tanger to improve their business presentation. Outlets lure a separate brand of shopper, and player.

“What you’ll see is a blurring of channels that start to extend to various brands, and the utility of incentivizing their customer base,” Pappano predicts. “Additionally, there will be a shift more toward real-time offers and expansion beyond the four walls of a casino. You’ll see traditional retailers leveraged to provide additional offers back to everyday consumers who participate in gaming. In order to truly entice the gaming consumer, you want to be able to tap into what and how they spend every day. You have to provide more pinpointed value than a standard free night stay. You need more diversity since demographics have changed.

“There is a variation among millennials versus GenX versus baby boomers. They all want to be approached  differently.”

CardLogix:Verified ID

While Vantiv and Sightline help gamblers shop, CardLogix targets online “drop.”

Its smart card not only governs  purchasing power, but enables play, particularly online.

That’s the perception gleaned from the Multi-Factor Authentication (MFA) solution from the Irvine, California-based company, which supplies cards and software to casino operators worldwide.

MFA is a finished software solution that involves a card. In a brick-and-mortar setting, the card can be placed right inside a slot machine. For online gaming, it not only enables the action but secures a person’s identity, according to the company.

Gaming regulators are prudent, therefore deliberate, in protecting the public and delaying the expansion of online gaming. That’s understandable, according to Bruce Ross, the CEO of CardLogix.

“Credit cards without chips rely on a simple magnetic stripe on the back, and, as we are all painfully aware, are subject to fraud,” Ross indicates. “Credit card issuers are just now converting to EMV chip cards to greatly mitigate this problem.

“However, the CardLogix MFA is not a financial card, and likely a credit card would continue to be used to play. The main safeguards on the card are the smart chip and the stored biometrics, which make it virtually impossible for someone other than the authorized cardholder to gamble or do anything else with the card.”

CardLogix tries to ease security concerns with MFA, which contains safety measures ranging from facial recognition to fingerprinting. A Las Vegas television station personality tried to crack the system and could not.

“Now that EMV chip cards are introduced into the U.S., smart cards will be infinitely more familiar to them and people who gamble,” Ross says.

The combination of smart card and biometric technology is already widespread in many other industries and governments, and the worldwide gaming industry is next. Biometric ID Credentials are becoming more commonplace. A smart card is an ideal solution for storing and protecting biometric data, which takes up a lot of room. In the compliance-driven gaming industry, this solution offers non-refutable verification of a transaction. The card can carry an electronic signature, further binding player identity to the transaction. The card issuer can also incorporate a user PIN for added security.

“We feel it’s only a matter of time until our field-tested solutions will be the gold standard for identity in the worldwide casino industry,” says Ross.

The MFA is targeted to casino operators and hardware/software gaming platform providers, like Scientific Games. It is not yet installed in any jurisdictions.

While U.S. online gaming proceeds slowly, the real prospect for the MFA is the rest of the world, Ross contends, because many countries opt for government-run, nationwide gaming, like national lotteries. There will be a succession of countries that legalize online play and will need the security of this type of solution, he predicts.

The MFA solution addresses basic regulatory concerns like age and location, along with problem gaming. It has versatility across online and physical gaming. The same card used for online play can open room doors, do player tracking, store value, power loyalty programs, and, ultimately, replace paper and TITO, Ross says.

The CardLogix MOST Card is a smart card central to the success of the solution.

The basic components of a complete system start with enrollment. Biometrics are captured at this point and stored on the card, which has the computing power, capacity and security to store it. Then comes card configuration. The MOST is a microprocessor-based card, and works just like a computer with its own operating system. The card is developed using software that allows a person to set the card up, specifically with keys and data structures.

For online identity verification, a PC is equipped with MFA software via a simple download, a camera and a small fingerprint reader. To log on, one inserts the MOST Card  received at enrollment, and, when prompted, verifies that his real-time identity (face via camera or fingerprint via reader) is the same as what’s in the card.

As a person  plays, he is periodically asked to re-verify. According to Ross, this solution authenticates one’s identity for gaming transactions, discouraging the practice of a minor jumping into an online game already set up by an adult, or a child pilfering the credit card of a parent to play.

The solution has gone deeper than most, if not all, of its predecessors. Yet even in this case, the company knows that success comes slowly.

That’s the only “smart” way to look at it.


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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