RFID in Casino Chips: Tracking your every move.

[Zeno]

Casinos Bet On Radio-ID Gambling Chips
The Wall Street Journal 05/13/05
author: Peter Sanders
(Copyright (c) 2005, Dow Jones & Company, Inc.)

The blackjack tables at the Hard Rock Hotel & Casino here were packed with gamblers and casino voyeurs on a recent weekend. But in the Peacock Lounge -- the casino's high-limit blackjack room, with minimum bets of $100 a hand -- the casino enjoyed an added advantage to its already stacked odds.

The reason involves a high-tech chip within a chip that is helping the Hard Rock learn more than ever about every move made by the high rollers. Computer chips embedded in the plastic gambling chips communicate via radio frequency with sensors placed under the felt table. The technology gives the casino's operators a trove of knowledge -- everything from a player's average bet to where each high-denomination chip is at all times.

The new chips are based on the much-publicized radio frequency identification technology. RFID has been in the news as Wal-Mart Stores Inc. has adopted it, tracking products from its suppliers' factories to warehouses and onto store shelves. The technology is also widely used in aerospace and health care to keep tabs on supplies.

Until recently, RFID had been cost-prohibitive for widespread use at casinos. Three years ago, a single RFID casino chip cost about $6.25. Today, that number is closer to $1.25, versus about 70 cents for a regular casino chip.

It's a price casinos like the Hard Rock and, most recently, the brand new Wynn Las Vegas, are increasingly willing to pay. In addition to being able to track more players closely, the high-tech chips offer protection against both chip theft and counterfeiting.

Casinos have long had the ability to watch players with video cameras and closely monitor slot-machine use, thanks to "frequent player" cards that are inserted into machines, but table games have been more elusive. "The most important thing from our perspective is being able to accurately capture people's play," says Kevin Kelley, Hard Rock's president and chief operating officer.

In the past, casinos have relied on pit bosses and dealers to continually estimate how much gamblers were wagering, which in turn enabled the casinos to figure out about how much a customer spent overall, and what level of discounts and freebies he or she was entitled to. With RFID, the chips are automatically scanned at each bettor's position, and the data are displayed in real time on a personal computer behind the table visible to the dealer and pit bosses -- thus eliminating the human guesswork.

The Hard Rock has been testing a player-tracking system developed by Las Vegas-based Progressive Gaming International Corp. for the past two months or so. The system counts the number of chips each player has before a hand is dealt, and quickly disseminates a number of factors about a player's habits and fortunes. Officials can soon know exactly what the player is "worth" to the casino.

"Knowing what someone is worth to our casinos is very important so we can provide incentives and offers based on this information," Mr. Kelley says. The offers, freebies and direct marketing promotions that land in a player's email inbox or home mailbox are predicated on this information and can vary greatly between two people sitting next to each other at a high-stakes table.

Meantime, unless they are particularly savvy, or they think to ask, players don't know they are being so closely tracked from hand to hand. On the surface, the RFID chips appear no different from ordinary casino chips -- no mean feat for those who designed them.

"It took so many years to make a chip that was exactly the same as a nonembedded chip," says Gerard P. Charlier, president and chief executive of Gaming Partners International Corp., one of the world's leading chip makers, with U.S. operations based in Las Vegas.

Mr. Charlier cites the "astronomical cost" and the exacting standards expected by both players and dealers as particular hurdles that had to be overcome. "The key for dealers and players is the feel of the chip and when we tested them in Europe, casino dealers sent us back to square one more than once," he says.

The first RFID chips in North America made their debut in 1996 at a casino in the Canadian province of Saskatchewan. "At the time, each chip cost $6.50, but the Canadian casino was willing to pay it," Mr. Charlier says.

Casinos in Holland also were using the technology. RFID became more common in Europe in 2001 as casinos across the Continent were forced to convert chips to the euro. RFID also trickled through Indian casinos in California, Minnesota and Louisiana and is expected to ride the wave of gambling's expansion in Asia, specifically in Macau.

To date, Gaming Partners International has sold about two million RFID chips, a fraction of the 18 million chips the company sold just last year world-wide. The RFID chips have a life span of about 10 years, and casinos see them as an "investment product," Mr. Charlier says, not something that will need to be constantly replaced.

The chips are embedded with microprocessors made by Philips Semiconductors; each has a unique serial number. Radio antennas strategically placed throughout the casino can track the location of individual chips as they move from the vault to the cashier's cage, onto the casino floor and as they arrive at specific tables.

Security, people in the industry say, is why Wynn Las Vegas chose to purchase RFID chips en masse from GPI. RFID can tell casino operators when chips are removed from the property, or, more importantly, can help them weed out fakes during manual counts.

Officials at Wynn Las Vegas declined to comment on RFID or other aspects of the new casino's operation, but people with knowledge of the details say that all high-denomination chips in the casino are outfitted with the technology and the company is waiting to decide which player-tracking system it will invest in.

The technology behind these systems is moving rapidly. Progressive Gaming's current system takes about seven seconds to read through 100 chips and a tracking-equipped table retails for about $8,000, says Tim Richards, vice president of development. But through continued innovation at both Progressive and Las Vegas-based rival Shuffle Master Inc., coming systems will be able to read an entire table of chips in about 0.2 second -- literally the blink of an eye. "Even two or three seconds to read 100 chips is too slow," says Mr. Richards.

Shuffle Master plans to unveil its player-tracking system in September. Kirsten Clark, Shuffle Master's director of marketing, says the company is building a system "to take RFID to the next level" as the biggest casino players in the game are slowly starting to climb aboard.

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