At the time, it was a radical idea: a private company performing duties that governments customarily performed around the world—testing gaming devices to ensure integrity.
It was even more radical because the time was the late 1980s, and the place was the United States, where slot machines and other gaming devices and systems were legally operated in precisely two states, Nevada and New Jersey. But with a vision of a much larger gaming industry, James Maida and Paul Magno would develop the concept into the first private laboratory dedicated to testing gaming devices and systems.
Today, as the company started by Maida and Magno celebrates its 25th anniversary, certification of slots and systems by Gaming Laboratories International is recognized as the industry standard, replacing the need for state-run labs in nearly all of the 28 U.S. jurisdictions hosting Indian casinos, as well as numerous other casino and lottery jurisdictions both in the U.S. and around the world.
In all, 45 U.S. states and 455 jurisdictions worldwide accept GLI test results. Government officials in new and planned casino jurisdictions seek the counsel of GLI in setting up their gaming regulations. GLI serves as a clearinghouse for regulators around the world, providing a forum for discussion of new rules, new technologies and new ways to test to ensure the integrity of gaming.
In short, GLI is an integral player in the worldwide gaming industry.
Not surprisingly, the company known as the foremost authority on regulation of the gaming industry had its beginnings in a state that has, over the years, been a model for effective gaming regulation, New Jersey. Maida and Magno, both enthusiasts of competitive sailing, met as youths at the Lavallette (New Jersey) Yacht Club.
In addition to sailing, the two men shared aptitude for mathematics and engineering. Upon graduation from Lehigh University with a computer engineering degree, Maida was snatched up by the New Jersey Division of Gaming Enforcement as a test engineer. Soon, he would tell his friend of an opening for a computer specialist at DGE. Magno, working at the time as a computer programmer for a New York banking systems firm, took the job.
It was 1987, and the expansion of the casino industry was about to begin—a fact both Maida and Magno realized. Meanwhile, New Jersey was gaining an unwanted reputation for its backlog of new slots in the approval pipeline at DGE.
“As a group, engineers, myself and some of the technicians used to talk about how the expansion of gaming was coming about, and that we should consider going out on our own and doing it without government involvement,” Magno, now GLI executive vice president, recalls. “There was a lot of red tape and political reasons why the testing took as long as it did. We all thought if we could do it on our own, we could probably develop a model similar to what New Jersey used, and we could be more efficient and get devices tested much more quickly, and probably better.”
Maida, who is GLI president and CEO, says the first chance to test that theory would arise that year, 1987. “Back then, New Jersey and Nevada were the only two places in the U.S. that you could place a legal bet,” he recalls. “Montana was just starting their lab, so we helped Montana get up and running.” With Montana set up as the third U.S. jurisdiction to allow casino-style betting with its video poker program, South Dakota was next, legalizing casinos in the city of Deadwood and VLTs in bars and taverns.
By the time South Dakota was setting up its testing lab in 1989, it was clear to Maida that casino gaming was ready for an explosive expansion. Passage of the Indian Gaming Regulatory Act the previous year was about to spawn the first casinos in what would ultimately become the $28 billion tribal gaming industry, and lawmakers in Midwestern states were beginning to discuss gaming on riverboats.
Maida says he realized at that time that several states would soon have casinos and the need to test and approve gaming equipment, so he was particularly receptive when the head of the South Dakota Lottery approached him and suggested that rather than helping the lottery set up its own testing lab, he set up a private testing lab.
“The idea was really conceived by the head of the lottery, Susan Walker, and a few others around me,” Maida recalls. “They said, ‘We don’t really want to test our own games here in South Dakota. We’re a small state. Why can’t we just contract with you, James?’”
Maida, who was in law school at the time in addition to his DGE job, accepted, and founded Gaming Laboratories International in June 1989—along with Magno, whom he lured from DGE.
The founding of GLI was visionary, to say the least. Maida says he knew how chaotic it would be if each new gaming state had its own testing procedure. “Every state should not duplicate testing,” Maida says. “I thought, why don’t we have a clearinghouse to do all of the testing, much like Underwriters Laboratories does in electrical engineering?
“Today in the United States, there are more than 300 gaming jurisdictions, when you count all the tribes and all the states and all the lotteries and parimutuels. Having to submit the same game to all of them would have been very duplicative, and very slow.”
He adds that working for the state of New Jersey in the mid 1980s showed him how relying on state approvals can put casinos behind the curve on new technologies. “The ability to upgrade (engineering) talent in a state working environment is very difficult,” he says. “Technology moves, frankly, quicker than government. We’re in a very highly competitive technical environment, with new games coming out all the time. And we just have a commitment here, that we’re going to get all the work done within 25 or 30 days. And, sometimes we get it done more quickly.”
From the early days, GLI was dedicated to quick turnaround in the approval of new technology. “Slot machine game production is like a movie,” says Maida. “When the movie comes out, you want to see it right away. And the slot manufacturers want to do national roll-outs. So, proper staffing is something that we saw the need for very early on, and we’ve adjusted our staff levels over the years—we’re more than 800 people now—to make sure that those turnaround times do not get too far out in the future, and that we can service each initiative appropriately.”
Building the Business
“Proper staffing” for GLI, of course, would change as gaming machine technology changed. Starting out when most testing was done on simple, three-reel machines, the tasks could be handled by a very small staff.
“Paul and I did all the jobs early on,” recalls Maida. “We tested the machines, did the accounting, all of it. We hired our first employee in 1990.”
“To be honest, as technology has advanced, a lot of the information is above my head!” laughs Magno. “The mathematics are much more complicated than just testing a three-reel slot machine. We used to be able to do the math easily on three reels, even five reels. But when you get into bonus rounds and the rest, we leave it up to our mathematicians and the guys with the Ph.Ds to do the calculations.”
Advancing technology was not the only reason GLI grew quickly during the 1990s. Maida’s original vision proved true as gaming expanded rapidly, and Maida and Magno made sure they were on top of every new jurisdiction opening up. “We would just read USA Today, which had little blurbs about when gambling was starting,” Maida recalls. “If we saw something happening in the state of Iowa, for instance, we got on a plane and went to Des Moines to meet with the gaming commission.
“Any time a new state was getting gaming, or a new Indian gaming compact was being signed, we would show up. We would work with the tribe, we would work with the state, we would work with the lotteries. We went in and introduced ourselves to the legislature.”
Before long, riverboat casinos in the Midwest were joined by Indian casinos in states like Minnesota, Wisconsin, Iowa and South Dakota, and the modern casino industry in the U.S. began to take shape. GLI’s business model, says Maida, was always to work with the regulators in new jurisdictions. “We bid contracts through RFP processes, and we win the vast majority of those,” he says. “Our client is still the regulator; it’s always been the regulator, whether it’s a tribal regulatory agency—228 of them—state regulators, a state lottery, a parimutuel or horse-racing commission.
“While we might be paid by the suppliers, all of our work is audited by regulators. The reports are addressed to regulators, and while we have to balance the line between regulatory needs—which is very important, and is our bread and butter—we also work with suppliers so they can conform to those regulations.”
“The manufacturers were quite helpful in introducing us to the regulators,” adds Magno. “Manufacturers gave us information on who was introducing bills to legalize some form of gaming, whether it be a lottery or actual casino jurisdiction. We would meet with these regulators, show them how we did testing, and put them in touch with current jurisdictions we were working with or had worked with, as a reference.”
Along the way, the company snatched up engineering talent to meet the challenges brought by the changing technology of the gaming industry—and built a training regimen into the culture of the company that has ensured that the company’s technical expertise is second to none.
“Our biggest challenges come when new devices are made that go away from standard EPROMs or standard memory packages—being able to verify all the technology, being able to test all the technology, coming up with test equipment and the right people to do the tests,” Maida says. “So, we invest heavily in technology here. We probably spend $2.5 million a year just on new technology, to make sure that our tests are better. We spend a tremendous amount of money on making sure our tests are standardized, and then we do a lot of training with our employees.”
Training is a constant for GLI employees, says John Grau, GLI’s vice president of engineering. “All of our test engineers go through unbelievable amounts of training, and they’re constantly being retrained as the technology moves,” he says. “Training and keeping our people up to date is something that as a private company we can do. States find it, obviously, very difficult to do that, but it’s really our cornerstone.”
It is how GLI has maintained its status as the leading test lab through generational changes in technology. “Any time a new technology comes up we’re doing security audits and network risk assessments,” Grau says. “Our clients said, ‘GLI, you need to be so much more than just slot machine testing and systems testing, or lottery testing.’ Clients are now asking, ‘Can you assess our network floor? Can we make sure that we’re secure? How secure are we at the cages? Can people hack in? Is our Wi-Fi secure?’ There’s so much more that we do than just slot machine testing and systems testing.”
Since 2000, the testing challenges have multiplied as ticketing, cashless play and server-based gaming were implemented in the U.S. and around the world. With the worldwide spread of online gaming, GLI added yet another testing skill set by acquiring Canada’s Technical Systems Testing in 2010.
TST, long a leader in interactive gaming testing, systems testing, and wagering system certification for regulators around the world, became what is now known as GLI Interactive B.V.
It was another instance of GLI being ahead of the curve. Magno says the company was not involved in iGaming that took place internationally, but anticipated legalization in the U.S. and a further spread of interactive gaming. “We saw the opportunity that if we purchased TST, they’ve already been involved in a bunch of jurisdictions that have allowed (iGaming),” he says. “We thought that brought instant expertise in that area, and allowed us to share personnel by moving some people from the States up to Canada to be more involved in it, and vice versa, to have people from Canada come to our U.S. offices and train people in testing to be prepared when it came to the States.”
For internet gaming testing, GLI deals directly with operators and content providers, as well as the regulators, Magno says.
The challenges of new technologies never ends, says Maida. Manufacturers are now pushing the envelope of skill-based gaming, with games straddling the line of awarding knowledge and physical dexterity while remaining fair to players who are less skilled.
One way GLI stays at the head of the technological parade is through a proactive approach using what Maida calls “technologists.”
“We have a group of people, technologists, who travel the world and meet with suppliers to identify the next-generation game that’s coming two years and three years and four years in the future,” Maida says, “and we start thinking about what that technology looks like. We actually start coming up with test plans ahead of when that’s going to be introduced, so we’re not scrambling when it arrives.”
Fairly early on, GLI’s proactive approach branched out from the testing of slot games to systems, from casino management systems to lottery networks. According to Magno, the genesis of the company’s system work can be traced to the strong partnerships it forged from the start with Native American gaming tribes.
“A lot of the compacts stated that there would be a central monitoring system,” Magno says. “The Indian gaming compacts really established a monitoring system not only for accounting purposes but as a security system—a slot door open, alarms for various events—which they did in larger casinos, but had not been a requirement. We were able to work with the Native Americans on what they wanted as security features on the systems.”
GLI also built its systems expertise on video lottery systems, which, like Class II Native American gaming, typically required monitoring and control of each machine from a central system. “Those were the first systems, even before the Native American systems,” says Magno.
The testing work for the tribes, though, began a longstanding partnership between GLI and Native American gaming, a relationship in which slots and systems for tribal casinos are certified once by GLI and instantly authorized for Indian casinos in several states. “A lot of our business, and a lot of our testing models, came from working with the tribes,” Magno says, “because we helped open many casinos in Wisconsin, Minnesota and elsewhere, testing not only the machine software, but system functions on the floor, before they even opened.”
This included the largest Indian casinos, Foxwoods and Mohegan Sun, the testing for which gave GLI a model it would use for years to come. “That got us proficient in helping to do audits at casinos, and software testing for openings, which we did in Mississippi, Illinois riverboats and a lot of other jurisdictions,” says Magno.
“Indian gaming has been very important to our company, and we try to give back as much as we can,” adds Maida. “We work for every tribe in the United States that has Class III or Class II gaming, and we’re real proud of that. We have more than 10 people on our development team who travel each week to tribal locations and talk to tribes about special requests.
“As you know, compacts are a treaty between the tribe and the state. The tribes have sovereignty, and the states have sovereignty, and they’re equal partners in a compact. And so, states have concerns, and tribes have concerns. We really want the tribes and the states to meet privately and work out their concerns, but where technology is involved and they need a little assistance, we’re happy to help when we’re called upon by either or both.”
Not long after the company established itself, GLI’s work with both tribal and commercial casinos in the U.S. would evolve into a worldwide business. The company currently tests games, systems and interactive gaming in more than 200 jurisdictions outside of North America, based on standards applying to more than 35 categories—including GLI 11, the recognized international standard for gaming devices, GLI 13 for online monitoring and control systems, GLI 23 for video lottery systems, GLI 26 for wireless gaming systems and more.
The task of managing this array of services for jurisdictions around the world falls to Ian Hughes, GLI’s vice president of global services. Hughes is also managing director of GLI Australia and GLI Asia; he built his understanding of worldwide markets when he first worked for GLI in Australia 20 years ago.
Six years ago, Hughes moved to the U.S. to handle global services for GLI, and began applying his expertise to other markets around the world.
“I set the overall strategic direction of what we do,” he explains. “I have some very long-term relationships with various government regulators and governments in the (Australia and Asia) region, which ties very closely into what I do as VP of global services. Essentially, it’s fairly simple: I try to understand what the regulator is trying to achieve, and understand what is achievable currently, and put that into place. We try to deliver services around that.”
With boots on the ground in various markets in Europe, Asia, Australia, the Americas and Africa, Hughes works with local operations teams to understand the dynamics of each market and deliver testing services effectively. “You need to know the inner workings of what’s happening in each market,” he explains. “What are their views, their policy concerns? Compulsive gaming could be a big issue for them, money laundering could be a big issue for them, underage play—whatever their policy concerns are at that time is what we’re focusing on.
“And that changes. Different jurisdictions have different views at different times, and even the same jurisdiction’s views change over time. So you need to have a very solid understanding of that.”
Hughes’ responsibility also reaches from current to future jurisdictions. “Some, such as Japan, are looking to introduce gaming, and they are around four or five years away from where Macau is today,” he says. “So, there are jurisdictions that are highly mature, that have been there for 25 years, and there are a lot of jurisdictions that will introduce gaming within the next five years. So, my responsibility sort of spans a 30-year continuum.”
With 21 current global offices, the world is becoming smaller for GLI. “We have some very good relationships with regulators and operators,” says Hughes.
“We’re also quite privy to some of the issues and concerns that they might have, particularly in introduction of new technology.” He says GLI focuses on bringing regulators and operators together to resolve technology concerns—“for example, if they bring in a new system, or new technology that has wallet or internet-enabled devices, how that affects their internal controls, and how that affects their risk.”
GLI has developed some ingenious ways of managing these worldwide duties, and making the world a smaller place for testing. One is a technology invented by Hughes and a team of engineers called GLI Link. “It came to me five years ago when I was in our Macau office, working with a systems vendor,” he recalls. “We were having troubles with systems interoperability in Macau, with a lot of new devices going in. There were manufacturers based in Korea, and we were asking them to ship machines to Las Vegas to do interoperability testing for Macau. I said, there’s got to be a better way to do this.”
GLI Link is that better way, allowing interoperability testing over the internet. With GLI Link, suppliers can ship devices to their local GLI lab, and GLI engineers can do remote testing for interoperability against every supplier’s system. “It really reduced suppliers’ costs, and enabled a gaming machine manufacturer anywhere in the world to go to one of our offices and do interoperability testing,” Hughes says. “We just hook it up through GLI Link and it operates across a very fast wide-area network.”
Of course, advanced technology is one thing, but there’s nothing that makes the world a smaller place better than face-to-face contact.
That’s where GLI University comes in.
GLI University is a program developed to keep regulators around the world up to date on new technologies and developing issues. “The GLI University was an idea that we came up with to provide really top-notch training,” says Maida.
The centerpiece of GLI University is the Regulator’s Roundtable. The company invites regulators from throughout a region to a location for workshops, discussions, networking and training sessions. GLI now holds roundtables all around the world.
As Maida notes, the program also now offers a diverse range of training outside of the roundtables. “We now have a list of courses with which tribal gaming commissioners can come and learn about everything from Slots 101 to Systems 101, all the way through to complex issues dealing with bonusing and system configurations,” he says.
“We recently signed an agreement with the National Indian Gaming Association, where we’ll be providing with them Level 3 certification. GLI will be providing part of that training, along with working with the National Indian Gaming Association. We also do training with the National Indian Gaming Commission and with other partners. So really, our goal is a really well-trained client, a really well-educated client, in all the technology that’s coming.”
That training will become more important in the near future, with the emergence of iGaming, mobile gaming and social gaming. “Devices are becoming more and more mobile,” says Grau. “From a technology point of view, we’re seeing more of people using their own devices (for gaming), so that brings a number of new security challenges.
“Another challenge is more use of electronic payment methods. We keep a very active file of digital currencies, but ultimately, the regulators make the final decisions.”
“The challenge that always exists is working with new technology,” says Magno. “You never know what it will be, but you have to monitor high-tech sites—gaming and non-gaming—to see what technology is used in other fields, and ask how it can relate to gaming. We then will determine what training we need to get our people up to speed, and then work with regulators on potential technology that could be used in the gaming industry.”
“The world around us is changing,” says Maida. “What will be the acceptance of iGaming? Will it be replaced with social gaming? Will social gaming envelop all of iGaming? What’s going to happen with mobile gaming, and what special concerns are there with mobile platforms? We’re testing those now.
“We see technology becoming more connected, the software in more places than a single box. All that will require more tools, more ways of validating everything for the regulator.
“It’s all about quality, control, tools, and testing to make sure that the public at large is consistently being safeguarded.”
Twenty-five years of experience certainly helps meet those goals.