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The Radio Chip

The perfection of RFID technology will bring new efficiency to the pit

For decades, the casino industry has looked to use radio frequency identification technology, without much success. Finally, after several false starts, RFID may live up to its promise—to bring heightened security and the same ability to track player bets to table games that slot machines have had for years.

The casino industry first began to look at RFID technology 20 years ago when RIFD tags were being used to combat mad cow disease by tracking diseased cattle.

In 1988 Harrah’s Entertainment asked John Kendall, current president and CEO of Chipco International, if he could put RFID inside casino chips. He’s been interested in the problem ever since, especially how it could be used affordably in the gaming environment.

The first manufacturer to use RFID in the casino industry was the former Mikohn Gaming Corporation, now Progressive Gaming International Corp. It introduced a product in the mid-1990s called Safe Jack (a twist on blackjack) that used RFID chips and sensors. It promised to track players’ bets, eliminate counterfeit chips, automate credits and fills to the chip tray at the table and generate dealer performance statistics.

It used 125 KHz inlays, i.e. silicon chips with a tiny antenna to capture radio wave energy. When a sensor in a table or in a handheld unit broadcasts a signal at the 125 KHz frequency, anything nearby will talk back to the reader, telling it, “I’m a $25 chip!” The reader’s software will total how many chips of how many denominations have been moved in a bet and will, for instance, tell the reader that the player has bet $50.

At least that is way it is supposed to work.

But in the 1990s, the only RFID channel that the FCC had made commercially available was the 125 megahertz frequency. The FCC assigns frequencies to the military, TV, AM radio, emergency responders and the police. In 1990 that frequency was 125 MHz, which worked fine for tracking animals. The problem with tracking a lot of casino chips is that the processing speed was too slow—you couldn’t get information in real time.

Another problem was that there were no good security measures available—it could be hacked. Third: the inlays were expensive, about $5 apiece. For those reasons Safe Jack failed to launch, although 5 million of the 125 MHz chips ultimately sold.

“It was the wrong frequency but it was the only one available,” notes Kendall.

During the mid-1990s the FCC, under increasing pressure, opened more commercial channels, including 13.56 MHz and 915 MHz in 2000 and 2.45 gigahertz and 124 KHz in 2001.

For various technical reasons, the 13.56 MHz frequency is the only one usable by the gaming industry. It is a magnetic frequency that forms a “mushroom”-shaped “cloud” similar to the earth’s magnetic field. It is possible using this frequency to place a sensor that just reaches to a chip at a particular player stack, without reading someone else’s stack.

“It is the perfect structure,” says Kendall.

Perfect for reading short distances, it doesn’t serve well for stopping theft or otherwise reading chips at a distance—say across a doorway. It takes 4.5 watts of power to do that, and until 2004 the FCC limited the power for such readers to one watt. That year it increased the allowed power for readers to eight watts with 13.56 MHz.

Now all of the pieces were in place to make RFID technology work.

Physics in the Way

However, in the intervening years many people told casino operators that the technology existed to do what regulations and the limits of physics said could not be done.

Those people, says Kendall, “were wrong. They didn’t understand the physics of the radio frequency signal and the gaming applications, or the reach required. Consequently, many early adopters were badly burned. They were sold technology that could not work. The 13.56 MHz is the proper radio frequency for gaming applications now that FCC has allowed enough power to reach across a doorway. So now these systems are being installed around the planet.”

One who got burned was Steve Wynn, who opened his Wynn Las Vegas casino on the strip in 2005 with an RFID system designed to stop employee theft and counterfeiting.

The sensors installed in the Wynn read chips at 125 MHz. The problem was that chips left on the reader too long burned up and “died.” That happened to 60 percent of the inlays in the first year, and no one knew why. Only after the chips were dissected was the problem discovered.

Today’s 13.56 MHz inlays have a default device to prevent that. Called cloaking, or “go to sleep” (GTS), it was introduced in 2005-2006.

The industry has said repeatedly that it needs an RFID device that can read a stack of 20 chips in a fraction of a second. This gives real-time information on how much Player A is betting so the operator can see if there’s something wrong and get the pit boss to watch.

Kendall’s company, Chipco, is demonstrating such a product, which came about when all of the pieces came together and prices fell for RFID chips.

Called the Intelligent Table System, it is undergoing testing and will soon be introduced to the market. However, Kendall says that what his company sells actually isn’t truly RFID, but another technology marketed under that term. He claims true RFID still hasn’t been perfected.

Two technologies are being marketed as “RFID.” One uses 13.56 MHz chips and 125 MHz chips with RFID inlays utilizing Australian-based Magellan Technology’s patented phase-jitter modulation design. Magellan’s innovative high-speed item-level system technology is used in 13.56 MHz inlays in partnership with Progressive Gaming and Gaming Partners International.    

Chipco uses magnetic coupling, rather than true RFID. “We market it under RFID because that’s what the industry is familiar with,” says Kendall. “Magnetic coupling is not broadcast technology; it’s electromagnetic technology.”

Electromagnetic technology is what a transformer uses to move telephone conversations through a line. The transformer “couples” the energy to transform it further down the line. It is different from radio frequency technology.

Kendall notes that, “The GPI and the phase jitter modulation technology are based on (19th century theoretical physicist James) Maxwell’s theories and our system does not use those principles. Ours uses (19th century scientist Michael) Faraday’s principles of electromagnetic induction, and we have applied for patents using his magnetic coupling.”

According to Kendall, “The problem is that they haven’t figured out how to control the 13.56 MHz signal, even though it is a magnetic signal. To read the 20 chips high, they need to energize it, and they can’t control it so it doesn’t read the chips of the guy next to him. It’s what I call the ‘cross talk’ problem. It gives an inaccurate report unless you control the cross talk problem by controlling where the system goes. In my opinion with RFID you can’t control it. Using Faraday you can control it.”

Kendall says his system can differentiate stacks of chips one half inch apart.

The Magellan Solution

Kendall’s claims would probably be disputed by Progressive Gaming’s Bodo Ischebeck, the company’s resident expert on the RFID technology.

“Progressive has been using RFID technology for some years, but the technology never caught on until two years ago,” he notes. That’s when PGIC partnered with Magellan.  “It can handle thousands of chips, even if the chips are very closely stacked,” says Ischebeck.

“With that technology we are catching on in the global market. We don’t face any competition anymore. That’s what the casinos have been looking for in the last 10 years. They never before liked the technology because it was too slow and too expensive and not reliable. We are coming to the point that this RFID technology is the right technology for the casino industry. The ship numbers show this.”

Progressive Gaming produces the chips and readers under a technology agreement with Gaming Partners International, the world’s leading supplier of chips, plaques and other table equipment. In the last 18 months, since the first chips were shipped to Macau, over 7 million gaming chips have sold. Wynn and two other Macau casinos have been joined by 20 U.S. casinos and several in Europe in employing the PGIC/GPI solution.

“We are building our product around this technology,” says Ischebeck. “RFID in chips gives the possibility to track where chips are moved on the table or throughout the casino.”

Progressive Gaming’s Chip Inventory System, or CIS, consists of an RFID-enabled gaming chip, chip stations and a centralized database server. CIS unites multiple devices and applications under one umbrella, including the cage, vault, chip banks, tables and chip trays. Each chip has a unique signature. Each chip is monitored in real time and its movement history can be accounted for during the course of its life. The system is designed for operators to know what is going on with every chip all the time.

“You can now get the same information from the table that you get from slot machines,” says Ischebeck. “Before, table managers relied on manual record-keeping and looking at tables and average bets, and trying to guess what the bettors were doing. This gives real-time information on table games.”

The second area where this technology is being applied is security: protecting against counterfeiting chips, and chip theft. When a chip leaves the table unauthorized, it can immediately be marked as invalid. The person trying to cash it will find it to be worthless.

The third area where PGIC’s product is useful is in building a new application range for jackpotting and bonusing. It can be used to rate players for comps.

PGIC is working with IGT for the U.S. market with IGT’s table management system, Table ID. For the rest of the world, PGIC has its own table management system and cage system that works with the RFID chips.

“I believe that RFID is a mature technology, but I do believe it has a way to go before it reaches its full potential,” says Eric Lancaster, IGT’s product marketing manager for Table ID. “As we move forward and can track the cards better, we can find out if someone is overpaid or underpaid. The key is tying it in other technology. RFID can tell if a chip was added, but can’t detect it during an addition. The key is to marry RFID to other technologies.”


The original September 2008 article entitled “The Radio Chip” reported that a vast majority of RFID inlays in chips manufactured by Gaming Partners International and sold to Wynn Las Vegas in 2005 were defective. Global Gaming Business has learned that no such issue ever existed with any of the RFID chips at Wynn Las Vegas. We could not independently verify the issue prior to publication, and should not have published an un-sourced report such as this. Global Gaming Business strives to provide the most accurate and up-to-date information for the gaming industry, and therefore apologizes for the error and regrets any harm the inaccuracy may have caused to Gaming Partners International.

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