Casino Enterprise Management

Research activities in the area of Future Networks are seen as the basis to deliver the next generation of ubiquitous and converged network and service infrastructures for communication, computing and media. This entails overcoming scalability, flexibility, dependability and security bottlenecks, as today networks are primarily static and able to support only a limited number of devices and applications. Such new infrastructures will permit the emergence of a large variety of business models, involving a multiplicity of devices, networks, providers and service domains.  —http://cordis.europa.eu/fp7/ict/future-networks/

With the adoption of Internet protocol (IP) in gaming, the ubiquitous Internet connects everything to everything. In the past, the server could only talk to specifically wired hardware sitting next to it in the same room. Now a server can be anywhere in the world and every electronic gaming device can be linked to it. The linkage does not have to stop there, though, since the connectivity of the whole Internet—along with proper, bank-level security—can be utilized to access electronic gaming devices from anywhere. Concepts like Software as a Service (SaaS) will start to permeate the gaming industry, and casino operators will be able to completely outsource all their systems operations. Co-locations will be commonplace, and you will see competing casinos running servers side-by-side in military-level security facilities.

A Brief History of the Internet
The beginning of the Internet can be traced back to the Cold War and the Sputnik crisis, which started with the Soviet Union’s launch of Sputnik 1 on Oct. 4, 1957, followed by the launch of Sputnik 2, carrying Laika, the first and only dog to die in space. This series of satellite launches sent shockwaves through the United States. By February 1958 the Department of Defense (DOD) formed the Advanced Research Projects Agency (ARPA), the largest funding agency for technical research and development at the time.¹

Three years later, a special office to support computer-related technologies, called the Information Processing Techniques Office (IPTO), was formed. J. C. R. Licklider, a psychology professor at MIT, was hired as the IPTO’s first director. His concept of the Galactic Network, a network of computers that allowed users to gather data and access programs anywhere in the world, as well as the concept of social interaction through computer networks, were detailed in a series of memos, the first written in 1960 and the second in 1962. The ARPANET, planned by Licklider and his team, was developed by the IPTO. Initially the ARPANET was a very small network of only four computers: Honeywell PDP 516 at UCLA, SDS-940 at Stanford, IBM 360/75 at UC Santa Barbara, and the DEC PDP-10 at the University of Utah (see Figure 1 above).² The addition of a variety of computers to the ARPANET created problems of compatibility, and the solution to these compatibility problems was a set of protocols called TCP/IP (Transmission Control Protocol/Internet Protocol), which was established in 1982.

The Evolution of Linked Games
The first slot game, the Liberty Bell, invented by Charles Fey in 1897 as a diversion, was a mechanical device.³ Electro-mechanical slots were introduced in 1964 and were replaced by video machines around 1975. The Virtual Reel⁴ patent of Inge Telnaes came in 1984 and completely changed the slot world, as a random number generator (RNG) instead of mechanical reels controlled the symbols displayed to the player. When advanced microprocessors started to control the reels in slot games, slot manufacturers introduced the idea of progressive jackpots in which a small percentage of each bet was added to the jackpot.⁵ In 1986 IGT introduced the linked multi-site progressive with the largest jackpot, Megabucks. Linked jackpots, aka wide-area progressives, are now common on casino floors. There are in-house progressive slots as well, and these can be seen even in small local bars with gaming.

Needless to say, computers have become an integral part of the floor in today’s casinos, and they use enough computer power to make most data centers look rather small. These computers on a casino floor have become connected so that they can talk to the central server and send data on carded customers to the casino database.

Looking in the rear-view mirror, it would have been hard to predict that the introduction of networking into casinos would open the door to customer loyalty programs. Harrah’s launched the first customer rewards program in the United States (Total Gold) in 1997, and the first tiered customer loyalty program in the gaming industry (Total Rewards) in 2000.⁶ The Total Rewards program allows players to earn credit each time they play and use their loyalty card, and then trade the accumulated credit for cash, rewards, coupons or comps. It has become one of the key elements of Harrah’s Customer Relationship Management (CRM) System. Most of the major casinos have their own loyalty cards now. We can only guess at how casino operators will exploit the immense power of the complete and intelligent network.

The Intelligent Network
These huge clusters of computers are expanding even more, with second levels of intelligent devices (electronic tables,⁷ RFID,⁸  table game tracking⁹) coming onboard. Now we are adding processing power to nearly everything—cell phones, handcarts, hotel rooms. All of these devices are now linked to this intelligent network. They can be controlled from anywhere, and they continuously produce accurate data. This data, when linked together, can transform an organization’s ability from “reacting to transactions” to “reacting to interactions.” In a world of interactions, every little action a player makes creates ripples of data. Each ripple, when combined with intelligence and a dynamic network, may be actionable, and those actions are likely to drive new strategies.

This massive data set is real-time, has spatial and temporal components, and is extremely important for generating a view of how the customer experience can be enhanced so that loyal customers come back and membership in the loyalty program increases.

Technical Brief
Understanding how a technology works, while not necessary, differentiates magicians from technologists. The following description will help you better understand the world of technology and should demystify networking.

In this section, we will briefly describe the key components of a network. A small local area network (LAN) connected to the Internet is shown in Figure 2 at left.

A Transmission Control Protocol/Internet Protocol (TCP/IP) is a protocol that ensures each packet of information is delivered. In other words, it verifies delivery. If a packet fails, then it is retried. To achieve this, TCP/IP uses three phase connections (see Figure 3 below).

A User Datagram Protocol (UDP)¹⁰, like the TCP, uses the IP to get a data unit (datagram), but unlike the TCP, it does not split a message during transmission and does not ensure delivery. In other words, an application program using UDP must ensure that entire package has arrived in the right order. Network applications exchanging disposable data, such as streaming media, are more efficient if they use UDP as a few dropped frames typically do not matter; this, of course, means that the application reading the stream will require fault tolerance.

All devices—in fact, all network adapters—have a physical address. This address is like a phone number; for example, 192.168.5.11 is the number that represents a physical network adapter in device (devices can have more than one network adapter). Typically, slot machines have a number of cards: at least one for the gaming device and one for the player tracking and other components in the device can have their own network address. With the proliferation of network devices, there is a system for sharing numbers between devices called masking. One simple example is the mask 255.255.255.0. This mask means that the first three pieces of the network address, in our example 192.168.1., are common to all devices on the network.
Bit Mask¹¹ is used to set certain bits in digital (binary) information to 1 while leaving other bits unchanged, like a painter masks areas that are not to be painted. For example, to set the middle four bits in the 12-bit binary number 100001010010 to 1, we can use the mask 000011110000 with the OR Boolean operator:

Thus, the address 192.168.5.11 (11000000.10101000.00000101.00001011) can be created from the Network Portion (192.168.5.0 11000000.10101000.00000101.00000000) and the Host Portion (0.0.0.11 0000000.00000000.00000000.00001011) using the Subnet Mask 255.255.255.0 (11111111.11111111.11111111.00000000) along with the AND plus OR operators.

A secure network can be designed to monitor a very large number of casinos while maintaining confidentiality of information, and hence, there will be no need for each casino to have its own monitoring system.

Boundaries that Will be Smashed
Software as a Service
In the coming years, we believe that the entire IT department will be outsourced, with the hardware, software and services provided by a specialist company. This specialist company will have the best experts providing the best service and will operate to strict quality of service standards. The Software as a Service (SaaS) company is likely to start with smaller operators, but in the end will win some of the largest operators over. This service operator will constantly add capabilities to its offering, and with each new capability, the operators will have choices such as “try before you buy.” Imagine testing the latest yield management software or visual analytics package without spending one hour installing the software. Imagine adding a new SMS marketing program without even talking with internal IT folks.

Linked Service Providers
The networking capabilities available today can also be used to link different businesses, and so casinos could be linked to related businesses (event management, accounting firms, etc.), providing alternative options for casino operations management. Imagine a marketing company in New England running an entire end-to-end marketing program in Oklahoma. This integration could include adjusting the behavior of lighting and other off-the-gaming-floor devices to match the style of the programs. Imagine how a local operation would change if it could bring to bear the best talent in the world with the latest ideas, delivered as if they were local.

Final Thoughts
Connectivity has been one of the driving forces for changes in the world. When you think of the humble telephone and the changes it bought, then try to imagine running a casino with no phones. You can see how communication enhancements eventually embed themselves into nearly every aspect of how we get things done. The power of TCP/IP in connecting any electronic device anywhere in the world to any other electronic device and to the Internet provides endless alternatives for the operations and management of modern casinos.

Footnotes
¹ www.computermuseum.li/Testpage/99HISTORYCD-ARPA-History.htm.
² www.livinginternet.com/i/ii_arpanet.htm.
³ www.readybetgo.com/slots/history/history-241.html.
⁴ www.freepatentsonline.com/4448419.html.
⁵ www.allonlineslots.com/progressive-slots.htm.
⁶ www.harrahs.com/harrahs-corporate/media-company-history.html.
⁷ www.casinocitytimes.com/news/article.cfm?contentID=174718.
⁸ http://news.cnet.com/Vegas-casino-bets-on-RFID/2100-7355_3-5568288.html.
⁹ www.casinocitytimes.com/news/article.cfm?contentID=174718.
¹⁰ http://searchsoa.techtarget.com/sDefinition/0,,sid26_gci214157,00.html.
¹¹ www.tcpipguide.com/free/t_BitMaskingSettingClearingandInvertingUsingBool....

Dr. Ashok K. Singh has taught statistics, mathematics and operations research courses at New Mexico Tech, Socorro, and statistics and mathematics courses at University of Nevada, Las Vegas. He has over 75 publications in theoretical and applied statistics.

Andrew Cardno has more than 16 years of experience in business analytics, ranging from modeling healthcare drive times to casino gaming floor analytics. He often presents on the future of analytics across the world and has spent the last seven years living in the United States and working with corporations around the world.