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Surveillance: Going Digital

Surveillance SPECIAL Report: How upgrading security and surveillance technology can save money

While the worst of times economically, it may be the best of times to upgrade your casino security system, and realize savings-both from buying new technology in a competitive market, and from improved overall casino operations.

Casinos are not known as technological pioneers. Most casino surveillance departments use analog cameras. Recording systems are VHS video cassette recorders.

To see how antiquated that is, look at your children’s cameras. VCR is a dying technology. You find VCRs at Goodwill stores, but not at Fry’s or Best Buy. Eventually, you won’t be able to buy VHS tapes.

You will, however, find VCRs at 90 percent of the casinos on the Las Vegas Strip. At some point, says Douglas Florence of Nice Systems, casinos will change, because they must.

Nice serves enterprise and security markets in 135 countries.

“I believe we will see an increase in security systems in 2009, because they have to,” Florence says. “Digital video recording has been around since 1994. The cost is significantly less today than in the beginning, but the problem is the number of responsible or qualified manufacturers.

“Security equipment, the CCD (charge coupled device) camera, and analog technology were driven by the camcorder. Now, what drives them are digital, megapixel and IP (internet protocol) cameras, which have more resolution than the best analog cameras in casinos. What will force us to look at the IP camera is that all of the other stuff we are using is digital. This digital convergence has been going on for eight years, but the casino industry has been slow to react.”

According to Florence, perhaps the greatest benefit of digital recording to casinos would be a reduction in costly litigation. “Litigation is the single greatest potential expense (for a casino),” he says. “If we can document that we did everything right, we can mitigate potential litigation or loss.”

Synectic Systems is a U.K.-based integration security solutions company. According to Chief Operating Officer John Katnic, now is a good time, cost-wise, to convert to digital. “You have a very competitive market,” Katnic says. “All manufacturers have numbers to hit. It’s a tough market in terms of purse supply and demand. You can get some of the best deals in a long time.”

Katnic says casinos have two reasons to buy a security system: 1) regulatory and 2) to prevent theft.

“From a regulatory point of view, the casino

doesn’t want to get shut down. You need the proper equipment. Some states have made it mandatory to go digital.”

Availability of non-digital equipment is declining. “The longer you wait, the more vulnerable you are to losing coverage and being fined,” says Katnic.

He adds that in a tough economy, desperate people will try to breach the system. “You must be on your guard,” he says. “Having the right system in place is more important than ever.”

He adds that times of business downturn are good times to switch systems. “During such times we cut the chaff and prepare for the inevitable growth that will happen after the winter of this economy,” he says. “That growth may be a year out, but these systems take a year to get people trained.”

Once installed, there are substantial savings to be had from a new digital surveillance system. Besides catching cheats, which can save a casino between $25,000 and $75,000 per incident on average, labor costs are saved from no longer changing or filing tapes, or fixing broken machines. Storage space also is liberated.

Beyond Theft Prevention

“The mindset we are trying to introduce to the market goes beyond theft aversion; we call it ‘video productivity software,'” says Katnic. “The entire operation can benefit. A classic example is the food and beverage department, where integration can generate major cost savings on shrinkage.”

Marketing can benefit too.  

“We have software that does patron counting. You can do reports on how many people go down certain aisles. If you have a new promotion or a singer on a Saturday, you can have video count patrons,” says Katnic.

Digital video also can stop valet parking losses. Many casinos pay off customers who claim their cars were scratched, because they don’t have proper surveillance coverage. With proper digital video coverage, video records can be scanned immediately. Customers can be shown whether their cars were damaged before or after they arrived.

Steve Wright of Indigo Vision adds that the new equipment achieves better performance and saves operating costs.

U.K.-based Indigo Vision designs and manufactures surveillance systems using digital high-resolution technology.

“I recently upgraded the surveillance system at the Colorado Belle in Laughlin,” Wright says. “Their operators report that reviewing a play at a table, which once took 30 minutes, now takes 30 seconds. Because it’s easier, operators will do it more often and find more instances of overpaying, or simple cheating.”

Customers also return to the tables faster. “Under the old system, the customer sat around for half an hour and wouldn’t be playing,” says Wright.

Switching from analog to digital can also be a “green” solution, by shrinking the surveillance system storage footprint, says Daryn D. Drulias, regional sales manager of Genetec, the Montreal-based provider of Omnicast, an IP video surveillance solution; Synergis, an access control solution; and Autovu, a license plate recognition solution.

Genetec’s open systems platform has no proprietary storage. Casinos can use existing hardware and leverage existing cameras without additional wiring.

Autovu’s license plate recognition software can be used in the parking structure, at valet parking or on a vehicle. Besides recognizing cheaters and frauds, it can alert the arrival of a valued customer or VIP.

Not to mention helping a frantic customer find his car now and then.

The Payoff

The top surveillance suppliers say upgrades to digital technology can pay for itself.

“A well-designed and installed surveillance system begins paying dividends immediately,” says Jim Oldstead, marketing communications director for California-based Pelco.

Pelco is a worldwide leader in security and surveillance equipment with a full line of cameras, enclosures, fiber optic components, twisted pair transmission components, and system-based products.

“Surveillance can use some of the ‘smarts’ in the system to alert them of events on unmonitored cameras,” says Oldstead. “By setting motion detection on an unused table in the casino, an alarm can be generated to pull video from that table to a user’s monitor if there is movement. This would alert surveillance of a possible theft of chips even if they were not actively monitoring that camera.”

Besides gaming protection, all gaming venues and cash-handling areas need to be secured, he adds, noting that video is a large component in that scheme-integration of surveillance with programs such as slot data systems, or point-of-sale systems in retail and restaurants, can help to quickly examine transaction data vs. video footage.

Olmstead notes that digital surveillance systems cost less than ever. The main cost is its recording media-i.e. hard drives. Prices of these systems are headed down while their storage capacity increases.

Dr. Bob Banerjee, marketing manager for Bosch Security Systems, Inc., notes that some vendors encourage casinos to rip out their analog matrix switch, but it is equally easy to argue to keep it in place.

“Adopting new surveillance technology means investing in IP, but not necessarily IP cameras,” he says. “The opportunity to save money is in selecting the right recording and storage technology for IP video streams. Normally, casinos would adopt NVRs (network video recorders). However, in addition to acquisition cost, they would have to pay for software licenses and ongoing maintenance costs. Instead, they can choose to stream video directly from the encoders to storage, which IT refers to as an iSCSI SAN, for recording. This eliminates multiple NVR PCs and reduces total cost,” he says.

There are other good reasons to keep an analog/digital mix.

“Analog cameras are super-reliable for live viewing, and PTZ (pan, tilt, zoom) cameras are important because operators can track individuals,” Banerjee  says. “The problem with an IP camera is that you hit the key but you get a lag. This is the problem with any IP camera that uses the network between you and the camera. This is why almost all casinos stick with some analog PTZ cameras. Most properties say ‘We will be out of business if they can’t see cameras live, so we will stick with analog but we want a really modern recording and playback solution.’

“They create two independent worlds that are brilliant at their own thing. IP video is fantastic for recording, playback and researching. To have the best of both worlds you install analog cameras that go into an analog matrix switch and then take a copy and go through encoders that convert it into digitized IP video.”

Doug Overstreet of JDL Digital Systems, a Washington-based company that writes OEM software, says a new surveillance system will pay for itself within two years.

“We put together our own ROI (return on investment) charts because every casino looks at this as a capital expense. VCR costs for a small casino can be $65,000 to $70,000 a year, whereas the cost of a DVR system across three years is $20,000. There is an initial outlay, but if you pencil it out by year two you are way ahead. By year three you are looking really good.

“The other thing great about tech is that processing power is great-bigger and faster hard drives. I’m getting people who are ordering less file size space, but they keep their videos longer because file sizes are smaller.”

This new technology, along with smart purchasing, can help casinos make it through the hard times.

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