Casino Enterprise Management

Technology on the gaming floor is exploding in all directions, with everything from handheld “in-pocket” betting to downloadable slot games to interactive skills games that can be played at home and on the casino floor. How do casinos evaluate, justify and invest in these new technologies, particularly in a tough economy? If you are building a new casino from the ground up, you have a fresh footprint, and that has distinct advantages … if you make the right technology choices and if you have a seamless implementation. For those of us who are operating casinos today within a footprint that has some years under its belt, we are facing questions about our options and the best way to get results. So let’s take a look at the world of server-based gaming (SBG) and its cousin, server-supported gaming (SSG). Obviously, this is a huge topic and one about which much has been written by true experts. This article is offered as a pragmatic perspective on the topic that will hopefully provide a bit of clarity from one person’s humble perspective.

Today, we operate in a world where each slot machine is a stand-alone entity. It has a game in it, and if you need to change the game or its hold percentage, a slot tech and a small army of “checks and balances” type personnel physically visit each machine. The slot machine is connected to accounting and marketing applications to keep track of transactions and points for each player. The slot machine can take in bills and it can spit out a ticket—pretty basic stuff. I would venture to guess that this profile represents reality for the vast majority of U.S. casinos today.

We are now experiencing a new technology shift. It has been coming for at least five years and has yet to reach its tipping point. What is SBG really and how does it compare to SSG?

It’s pretty easy to explain what SBG is, but it is a great deal harder to get there. What is confusing is that terms like server-based gaming and server-supported gaming started being used interchangeably in the exuberance of delight with these new technologies, and then we all got a little disoriented.

So here goes my version of the description that relies heavily on one of the most helpful sources of knowledge, Wikipedia:

Server-based gaming (SBG) is a solution employed by casinos to operate electronic gaming machines (EGMs), or slot machines. This solution includes a central system and gaming terminals that connect to the central system. SBG systems may be operated locally over a local area network (LAN) or span large geographical areas over a wide area network (WAN), such as the Internet. The unique aspect of SBG is that both game logic and random number generation (RNG) are centralized on the server. The slot machines themselves must be authorized and connected to the central system in order to function. So think of it as a server with multiple clients and the server can execute multiple game programs. The slot machine is a generic (also could be described as dumb) terminal. Different slot games can be downloaded into the slot cabinets. Slot managers will have the ability to change a slot machine’s games, denominations, bonus payouts and promotions from a central computer server. This will be a valued role and will require some very good skills. This individual needs strong technical skills and will work closely with casino operations management and marketing.

Essentially, SBG builds on the principles of thin client computing and it has amazingly similar characteristics to Internet gaming. Each slot machine is equipped with minimal functions: a user interface and a communications function to connect it with the server. This architecture is expected to reduce the costs for both hardware and software. This may be true over a period of time, but the reality is that a number of critical investments will need to be made prior to booking any value. SBG requires an Ethernet floor, with CAT 6 copper wiring or fiber. The cable lengths can only be so long before they need to be connected to a switch, and the switches need to be robust and have redundancy. This new architecture will require maintenance and technical support with a pretty tech-savvy IT team, 24/7. Do you see IT staff increases on the horizon?

The benefits that are expected from SBG include:

• Multi-channel gaming, which allows players to access games on other platforms as well, such as mobile phones.
• Linked gaming content, support for wide area multiplayer and progressive jackpots.
• Instant access to any game available in an operator’s catalogue, enabling a long tail effect. This can be compared to stand-alone gaming terminals, which require games to be installed on location by changing a computer chip (or EPROM) or SSG, which requires that the complete game is downloaded before it can be played.
• Personalization through the use of player profiles.
• Lower hardware, software and maintenance costs for game terminals, due to their thin client nature. (This is the hope, not necessarily a promise.)
• Real-time monitoring of game terminal status and game transactions.
• Higher security, since the RNG and game logic can’t be manipulated at individual game terminals. (Not sure this is a major issue)
• More control-software, hardware and peripherals can be disabled if digital signature verification fails. Compared to stand-alone and SSG terminals, unauthorized SBG terminals cannot be operated since they rely on the central system in order to function.
• Responsible gaming features that require advanced monitoring capabilities.
• Reduced risk of piracy, since only the client components of the game are stored locally.

One of the questions that come to mind is: Is there enough game content yet to support an entire floor of SBG? If you recently purchased a 3-D TV, how many movies in 3-D can you watch, or better said, how many times can you watch Monsters vs. Aliens?

I also wonder how long it will be for our gaming guests to migrate off their old favorites to the newer games. Or how do the older games get transferred to the new SBG world? It seems to me that most operators will only be able to maximize the value of SBG for a portion of their floor for many years. How long will it take to reap the financial rewards from the expected benefits and gain the ROI from the infrastructure investments? On the other hand, what is the cost of not moving forward?

An interesting idea to ponder is, how will the games be sold in the future? Currently we buy a slot machine and we also buy or lease a game. We can touch the game chip and we install it manually. We have a simple cost structure. In the SBG scenario, the game is actually virtual and the way it will be sold may end up on a usage basis, on a subscription basis, perhaps. Game investments will go from being capitalized to being new operating costs. That could have a significant impact on casino budgets and bottom line performance. The fluidity of game choices could be good, in a way, because the less popular games will not cost as much as the popular ones and retiring losers will be a whole lot easier. On the other hand, it may create such a demand for new product more frequently that gaming manufacturers will be unable to meet the expectations. That’s when some new and exciting new players will enter the mix and we will see an era of garage developers. GLI and gaming commissions will have their hands full then!

In April 2007, the Nevada gaming regulators approved the first manufacturer’s server-based gaming system. How many SBG solutions are operational today? There are some, but many of the installations are actually SSG systems. ARIA is the largest installation of server-supported gaming in Las Vegas.

SSG is actually the baby step many casinos are taking before adopting a full SBG strategy. A key difference between SBG and SSG is that in SSG systems, each game terminal has to contain a random number generator (RNG) and complete local copies of the games, whereas SBG systems centralize both the RNG and game logic. In SSG systems, the server support is limited to analysis, content distribution and management, while SBG systems utilize the server for the actual game play and multiple other features.

In order to implement either a SSG or SBG solution, you need to have implemented an infrastructure that can support it. Here is a simple, yet mind-blowing list of what you need to consider:

• If you have a flat network (which most casinos do), you will need to partition it.
• Your casino floor needs to be converted from serial to Ethernet. You will need CAT 6 copper wiring or fiber.
• Since the CAT 6 lengths cannot be longer than 330 feet, you will need to have a plan that keeps switches within the cable lengths using more wiring closets or bank switches. Either method should include a design that reduces the effect one switch failure will have on the casino floor. Better make it redundant to be safe.
• You will also need to consider having UPS in all the banks or closets where you have switches. You cannot afford to let a power surge or drop impact your slot machines. This is especially true in the world of SBG, because once the connection is lost, the machines are DOA.
• Most wiring closets will need to be upgraded with cooling, security and fire protection.
• You may also need to add more wiring closets to accommodate the additional infrastructure’s needs.

The design and vendor selection process to build your Ethernet floor is a critical component of moving into this new world of SSG and SBG. Inevitably, there will be down time on your floor during the implementation process. This can be managed many different ways and minimized to some extent, but IT needs to be very upfront with marketing, operations and finance so they know the timing and full impact of an Ethernet floor implementation.

The investment required to create an infrastructure to support either SSG or SBG will be determined by your current footprint and how you plan to design your architecture. Suffice it to say that the investment will not be insignificant. We all need to fully understand the time it will take to implement the technical environment at our properties and the impact of potential downtime on revenue streams. All these elements need to be factored into a company’s cash flow and investment strategies. Pre-planning is essential.

In summary, we are in the midst of a profound shift in technology, one that will have a profound impact on our industry. It is happening now and it will gain momentum over time. At some point down the road, we will all forget how traumatic the transition was and we will be looking at the next new best thing, and you can already see that it is linked to Internet gaming. In the meantime, the strategic direction each casino takes on this path will be determined by their own business drivers and objectives, not to mention cash flow and debt levels. The ultimate trick is to make the transition at the optimum time for your company. In business, as in life, timing is everything! Good luck!


Sheleen Quish has been the CIO for Ameristar Casinos Inc. since January 2007. She is the former VP & Global CIO for US Can Co., where she was responsible for the global infrastructure, three data centers and a wide array of applications. She has 20 years of marketing and operations experience in health care and insurance before venturing into IT management. Over the last 15 years, she has been in a CIO role in multiple industries.