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The Future of Casinos

by PAUL TULLIS - July 2009

Published in Destinations :: Destinations

ILLUSTRATIONS BY ARMY OF TROLLS


You're sitting at a blackjack table at a large Vegas casino.

In some ways the environment is a familiar one: You hear the dings of the slot machines, the tinkling of cocktail glasses and the buzz of conversation. You try to figure out if it's true that they pipe in additional oxygen to keep players awake. A dealer stands at the other side of the table from you and your fellow players.

At another level, though, things are very different from the last time you were in a casino. Instead of exchanging cash for chips, you just sit down and swipe your room key, and the funds left over from when you called it quits last night are at your disposal in an electronic account. On the table in front of you where your chips would be is a touchscreen, offering an array of bets not available on an old-style blackjack table.

Twenty minutes ago, you were playing baccarat at this same table, but you and your tablemates wanted to switch to blackjack, and so it was done-without having to move. You see in a corner of the screen that 267 other gamblers in remote parts of the casino are laying bets on your pair of nines, with 194 of them doubling down from the handheld multimedia devices they're carrying. Your own iPhone chirps in your pocket-the split bet you placed on the roulette wheel while dining in the restaurant earlier in the night has just hit-and suddenly you have $1,700 more to play with than you did a minute ago. You hear your name, and there's a robot standing there with the drink you ordered...

OK, maybe no robot waitress.

The rest of this scenario, however, will be entirely feasible in the very near future, say senior management and IT professionals at top casinos, as well as third-party game developers. The casino business-initially slow to adopt the information technology developed over the last decade and a half-is now playing catch-up. Recent increases in computing power have meant that the industry can bring more action to the casino floor-particularly to table games like blackjack, baccarat, various iterations of poker and roulette.

These changes are underway and can be seen at some of the more forward-looking casinos in Las Vegas and Atlantic City. And in the next five years, according to Mike Murphy, vice president for information technology at Barona Resort & Casino (30 miles from San Diego), the massive multiplayer videogame structure now online and available through consoles like the Xbox should be coming to casinos. In the more distant future, say 20 to 50 years from now, industry visionary John Acres predicts that internet gambling will synthesize with holo-graphic technology, projecting a casino into your living room.

These metamorphoses are partly a function of the changing demographics of casino-goers and the different interests of the new generation of customers. "For casinos to survive, we've got to attract that younger crowd," Murphy says, "and they're bored by slot machines. So we're going to have to come up with a different type of experience."

Because of its remote location, away from the hustle and bustle of the Vegas strip and the Atlantic City boardwalk, innovation has been forced on Barona. According to Peter DeRaedt, chairman of the Gaming Standards Association (which works to facilitate open computing standards for the gambling industry), it is one of the most technologically advanced casinos currently operating.

A lot of the credit for that distinction goes to Don Speer, chairman of the consulting firm VCAT and an adviser to the Barona band of Mission Indians, the Native American tribe that operates the casino. Speer was named one of the industry's "top technology professionals" last year by industry trade magazine Casino Journal. At Barona, everything- including the predictive analytics software that looks at how players are doing, the displays that advertise its restaurants, and the data mining and casino management system that underlie it-flows from Speer's gray, bespectacled head.

"There's a golden era of gaming that's long gone," Speer says. Barona tries to harken back to the Las Vegas of the 1960s and '70s, when everybody knew your name and your tastes. Back then, the bellhop might have noticed your watch and your luggage when you checked in and given a heads up to the floor manager; today, Speer's system reads the magnetic stripe on your Player's Club card and figures out, for instance, that you like baccarat (you played last night for 143 minutes between 8:27 and 12:14) and Randy Travis (you bought front-row seats last time he was here), and you haven't been making your usual handicap on the golf course.

When the casino's computers see that you are ahead $2,200, you're offered, via an Ethernet-linked computer display terminal made by Bally Technologies called an iView that's embedded in every slot machine on the floor (and soon to be in so-called "hybrid" electronic table games), a golf lesson for the day after your scheduled check-out (to get you to stay an extra day). And when you return home, there will be a discount waiting for you in your mailbox for Travis tickets the next time he plays Barona.

"We give players the right offer at the right time," Speer says. "There's a time, an amount and a type of offer for everything, and we have a very generous player reinvestment strategy that isn't just cash back or comps or credit. It's giving the personal touches."

One of the men charged with implementing Speer's vision on the floor is Mike Patterson, vice president for table games. In his "lab" at the resort, Patterson is testing new games and systems. "Most casinos farm out their training and lab environments," he says on the way into a common beige trailer that belies the work going on inside. "Nobody [else] would let me do the R&D I do."

On such game is the i-Table. The size of a standard blackjack table, with a touchscreen at each of the six player positions, it combines electronic betting software with a human dealer. Made by Shuffle Master Inc., which has developed many of the more popular new games (see sidebar), the i-Table could be a game changer for the industry-if it's accepted.

Patterson is experimenting with different configurations of the device in search of the one that will make players, employees and government regulators most comfortable using it. The i-Table is one of a host of electronic versions of old-school games such as craps, baccarat and roulette now being introduced. Because a computer can calculate payouts quicker than a human, electronic games can take more bets in the same amount of time (for example, 72 hands per hour with electronic baccarat against 35 the old-fashioned way).

"The more hands per hour, the lower we can price the game and make the same amount of money," says Lee Skelley, executive vice president and assistant general manager at Barona. Lower prices make games that can seem intimidating and complicated accessible to new players.

You don't have to have lost your job to a robot to see where this could head, but Patterson says customers won't accept these traditional games without a live dealer. "Electronic games allow you to become efficient, but I don't see us being able to take the human element out of it," he says. He compares it to the way movie theaters have improved since cable and DVDs started competing for their customers. "They had to make the experience better. Each product becomes its own experience," he says.

The changes currently underway at casinos like Harrah's in Atlantic City and Wynn and the Venetian in Las Vegas began a few years ago with "ticket-in, ticket-out," or TITO. This system has replaced coin-operated slot machines; you just slide a bill into a validator (like a soda machine), and the game issues you a card that can be used in any machine in the casino. TITO provides advantages to both players and operators, among them not having to lug around buckets full of filthy coins, and being able to track individual play and reward customers based on their gains and losses.

TITO was just the beginning. The next two, five, 20 and 50 years should bring changes to casinos and gambling itself that are now difficult to imagine. The technology that's close to fruition and seems to bring the most excitement is so new it doesn't have a commonly-used name yet, but the idea is that you'll be able to play any game with a mini-computer in your pocket, like your phone or a device like the one offered by Cantor Gaming, the eDeck, which is currently at the Venetian and the M Resort in Las Vegas. The hope is to roll it out at other locations and offer back-betting on live games.

"If you look at the demographic coming up today," says Cantor's marketing director John Buyachek, "the speed at which everything in their world takes place, they walk into a casino and they're like, 'Is this all you got?' The concept is to make table games as exciting as possible. The betting never stops."

John Acres is one of the casino industry's true visionaries. Now 55, he started fixing electronics in casinos at 18. Acres predicts that internet gambling will soon be made legal in the US. "My guess is within five years," he says. This will open up opportunities for brick-and-mortar casinos-

DeRaedt sees internet gambling as "complementary and potentially even a driver of casino gambling"-that Acres sees "lead[ing] to some interesting scenarios."

First, Acres says, there will be casino games that look a lot more like today's videogames, relying on skill more than chance. "You'll see physical and mental skills involved in much the same way our non-gambling games now offer," he says. Moreover, he says, "You'll see people playing on teams which compete against each other." Some of these games, Acres foresees, will be in a tournament format, with more highly-skilled players able to compete for "bigger prizes and higher returns."

And what of this casino projected into your living room? There, all the games of today's casino and more will be available, except you won't be limited to competing against whoever happened to drop in that day. "With physical borders no longer an issue," Acres says, "you'll be playing against others from around the world."

Back in the present day, Mike Patterson stands beside a game at one of his tables, a poker variation that uses a 28-card deck of eights and higher. He's testing it out as a courtesy to one of the game developers he works with, but the table is empty. Ever enthusiastic, yet pragmatic, Patterson acknowledges that this game looks like a bust, and offers a frank assessment that may be the industry's best approach for the future: "We're in the gambling business," he says. "So we've got to take chances. But it's not without a lot of thought that goes into it."

Glen Hiemstra, the author of Beyond 2020: The Shape of Things to Come and operator of the web-site Futurist.com, supports Acres' predictions. "Casinos will offer incredible, full-immersion 3D experiences via the global net for those who cannot travel," he says. And, he continues, even as Internet gambling ramps up, casinos will become more valuable in the future. "The virtual world in 50 years will be indistinguishable from real world, [so] there will be a hunger for in-person experiences. The in-person experience [at a casino] will get, if you can believe it, even more grand and elaborate."

WHAT'S IN THE CARDS

William Schneller has been dealing craps, roulette and blackjack at the Trump Plaza Hotel and Casino in Atlantic City, NJ, since 1984. Here, he reveals how gaming has changed over the years-and speculates on the future.

How has the industry changed since you started working in the '80s? "It has changed a lot. [The casino owners] are more conscious of the hours that people work now."

What was it like working in the casino then? "It was an exciting time. You had boxing with Mike Tyson back then, a lot of high rollers. We had a Neil Diamond weekend when we first opened. Donald Trump was here a lot, too."

What has been the biggest innovation in the last couple of years? "The nightclubs. What they're trying to do is bring a younger crowd in. With the nightclubs in the casinos themselves, you get more twentysomethings coming."

What do you think the casino of the future will look like? Will there be robot waitresses? "I tell you, I think it will have to be a multi-faceted facility. It will have gaming, nightclubs, retail… I don't think there will be robot waitresses, though. No matter what, you will always have to have human interaction."

5 GAMES TO WATCH

"95% of the games that are invented will never see a casino floor," says Dennis Conrad, president of Raving Consulting Company, which operates a conference on cutting edge table games August 17-19 at Las Vegas' Mandalay Bay Hotel & Casino. Here are five recently developed table games that have made the cut.

Rapid Baccarat
The is an electronic version of James Bond's favorite game. Traditional "bac" is known for its complicated structure, slow pace and social dimension of several people betting on the same hand. Shuffle Master Inc., which makes Rapid Baccarat, hopes this version will attract newbies: With your own terminal, you can play your hand or the dealer's hand without slowing the game for other gamblers as you learn the ropes. Faster hands means casinos can offer a lower minimum bet, making it more accessible.

Rapid Roulette
The electronic version of this classic table game speeds play dramatically and, experts say, will eventually allow you to follow the bouncing ball from anywhere in the casino. It brings traditional betting options familiar to slots players, like jackpots and progressives, as well as trifectas and the like for those who enjoy playing the ponies.

Mississippi Stud Poker
Most new, non-electronic table games are variations of Texas Hold 'Em. This version lets you compete against a set chart of payouts instead of a dealer's hand. You get two cards to bet on, then you can increase your bet as three "community" cards, which everyone at the table shares, are turned over one by one. A pair of jacks or better wins, and anything above a pair of five earns you a "push." Casinos usually structure this as a "progressive" game: Each bet goes toward a jackpot that pays big hands like the royal flush over (potentially way over) your individual bet.

Dealer Bluff
A "hybrid" game played at a table and dealt by a machine with a computer's brain, this probably comes closest to the feel of real poker. A single-deck shuffler deals and reads the dealer's hand, then makes a bet based on that hand. Players can fold, call or raise-but be careful because an algorithm in the computer tells the dealer to bluff sometimes. Your opponent could have nothing and make a huge bet, or a great hand and make a huge bet, scaring you off. Wynn Las Vegas and one other casino we can't name will have this game in the very near future.

eDeck
Not a game per se, this hand-held device plays blackjack, baccarat, poker and roulette (European or American)- with a twist. On blackjack, it offers additional bets: You can increase it after seeing the dealer's up card, bet on the dealer if you think he'll beat you or bet that he'll bust. Although only at the Venetian and the M Resort in Vegas so far, manufacturer Cantor Gaming has high hopes for many more venues soon.

THE EVOLUTION OF SLOT MACHINES

1891
Brooklynites Sittman and Pitt invent the first precursor to the slot machine-a drum-based poker machine.

1899
The first mechanical three-reel slot machine (often called a "bell machine") is invented by Charlie Fey in San Francisco.

1910
Anti-slot machine laws lead slot manufacturers like Herbert Mills to stock their machines with gum instead of money.

1920s
Gangster Al Capone takes over the Burnham Mills slot machine company to provide his speakeasies with extra income.

1930
The Electrovender, with a small motor and button instead of a handle, becomes the first electrically operated Bell machine.

1942
Slot machine production halts because of supply shortages caused by World War II.

Late 1940s/Early 1950s
Western artist Frank Polk carves 92 wooden figures to fit around slot machines, including several cowboys and Indians.

1951
The national Johnson Act slows slot machine sales by preventing their shipment to states other than Nevada.

1964
Bally Manufacturing Corp's "Money Honey" is the first slot machine that pays out completely automatically.

1975
Walt Fraley develops Fortune Coin, the first slot machine to use a television screen.

1984
Inge Telnaus patents a computerized method of determining slots outcomes that forever alters the odds of winning.

1986
The Megabucks system becomes the first group of slot machines whose probabilities are linked across locations.

1990s
Slot machines get sleeker with rounded tops or inclined playing surfaces that make gamblers more comfortable.

2000
Slot manufacturer IGT rolls out its newest innovation: a ticket-based slot machine called EZ Pay that requires no coins.

2003
A 25-year-old software engineer wins a $39.7 million jackpot-the biggest slots payout ever-at the Excalibur hotel in Las Vegas.

2009
Konami Gaming starts developing environmentally friendly slot machines that automatically reduce power after business hours.

Published in Destinations :: Destinations

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