In the second installment of Slot Manager's five part series on server-based and downloadable technology, operators and manufacturers weigh the costs and benefits of both thin and thick client-server architecture
Operators and manufacturers generally agree that server-based gaming will come to U.S. casino gaming floors in the next few years. But what client-server architecture may be implemented remains unclear....
Second in a five-part series
Operators and manufacturers generally agree that server-based gaming will come to U.S. casino gaming floors in the next few years. But what client-server architecture may be implemented remains unclear.
In the United Kingdom and in many lottery jurisdictions, server-based gaming generally has followed a thin-client approach in which the gaming device is a dumb terminal and most or all of the intelligence and content resides on the server. A thick-client approach still has data stored on a server, but the gaming machine handles most of the data processing.
"In Europe - the UK specifically - server-based, downloadable gaming has been widely adopted and operators have witnessed great successes," according to Peter DeRaedt, president of the Gaming Standards Association. "They are now exploring ways to grow their business even more."
Those operations also are much smaller than most U.S. casinos, which often have hundreds or even thousands of slot machines, so the ability for those smaller operations to replenish their smaller inventories of gaming machines with new content is imperative to give players more choices and new experiences.
In the United States, however, there is a very large installed base of gaming machines, making the transition to server-based gaming more of a challenge and more expensive.
Gaming analysts have said they believe the server-based replacement cycle will probably begin in 2008 and go through 2010-2011.
"Although general concerns remain with respect to the timing of [server-based gaming], as well as the industry's commitment to it, we believe that [server-based gaming] is both on track and is well-embraced," Deutsche Bank gaming analyst Bill Lerner said in an investment report. "Assuming that the server-based gaming cycle follows the same curve as the cashless cycle, we believe about 80 percent of these units could be replaced over a three to four-year period beginning in 2008."
But it may take longer, many believe. For one thing, some gaming executives say they have yet to hear an argument compelling enough to convince them to spend the significant capital outlay for server-based gaming.
"We're waiting for somebody to give us that "Eureka!" moment, that 'Oh, I get it; this is a great reason to change,'" said Gregg Solomon, chief executive officer of MotorCity Casino in Detroit.
"We've haven't seen anything from the manufacturers that falls into the 'we've-got-to- have-it category.' Until we can have one system that all machines can talk to, I don't see us moving forward," Solomon said.
Although he said he's still on the fence, Solomon is hedging his bets by rewiring his casino floor to accommodate the necessary bandwidth for server-based gaming if and when it becomes a reality. But Solomon was lucky; MotorCity had already planned a casino expansion that provided the opportune time to undertaking the rewiring.
Server-based is coming, but won't be implemented in a big way for another three years or longer, said Chuck Hickey, director of slot operations at Barona Valley Ranch Resort and Casino. The San Diego-area casino is a test site for IGT's initial server-based technology.
"Right now, it's way too much of a beta to really be marketable," he said. "There might be some limited applications where it would work now, for say a riverboat where they have a limited number of machines and a very controlled environment. But at this point, there's not enough in it for the player. People have to want to single these games out and play them."
Bruce Rowe, president of Renaissance Casino Solutions, said the thick client approach likely would be the easier model for U.S. casinos to adopt, at least initially.
"It's much easier to convince regulators of being able to do the system-driven command and control-type activities that affect the game in a more efficient way but the same way that is similar to how it is currently done today," Rowe said.
The thin-client model is more challenging, he said "When you start to move to a thin- client model, you start to move into a new paradigm," Rowe said.
To centralize the function for any business enterprise has significant complexity and associated risk, he said.
"What I would suggest is if you look at the speed of [adoption for] meters or bill validators and TITO as analogous technologies, you're not seeing the same rush or pull through. This is complicated and the value proposition is not clear," Rowe said. "It's a fundamental paradigm shift for the industry, and you're not seeing it [pull-through] for a reason."
It comes down to bottom-line risk, Rowe said. "Today if a system is down, the player is not affected," he said. "In a system-driven [thin-client] environment, you conceivably could lose a large portion or all of your floor."
The value proposition and the price models for this technology is still being evaluated and created, Rowe noted. "I think at this stage we're really at 'proof of concept,'" he said.
What would drive thin or thick client is probably the approval process, Solomon said. And the thick client scenario is "more likely to occur in the short term than the long term."
"In the short term, I believe the reconfiguring the particular games library is most easily implemented than actually driving content from a central server to the machine," he said. "Bringing the customers and the regulators along with the changes just takes time."
Solomon said he's also been disappointed that manufacturers haven't seemed to have incorporated some of the interoperability functions he another operators have wanted to create more efficiency in their operations.
Thin-client has worked well in certain applications, such as routes and pub applications where game content churns fast because of the small number of games and the local clientele, he acknowledged.
Videobet, a subsidiary of Playtech and a provider of server-based gaming in the UK, Europe and South America, has taken significant steps to ensure its systems' reliability and redundancy.
"The latest technological developments are guiding all of the major operators in the industry toward server-based gaming in order to stay ahead of the competition," said Shmuel Weiss, Videobet chief executive officer. "Operators moving towards server- based technology have no need to hesitate as Videobet's solution is flexible enough to answer the business needs of both small and large operations and can fit operation of any size without major operational risk while still dramatically increasing revenues."
Videobet has installed terminals in land-based operations throughout the UK and South America, and is making inroads in various European markets such as the Czech Republic, Romania and the Ukraine. Videobet also is in advanced discussions with operators in
Asia. Videobet's system is based on full redundancy and backup server architecture. In the case that the main server breaks down, a secondary server comes to action and eliminates any down time of the system might have experienced. The company also offers an advanced hybrid feature, which eliminates the terminals dependency on continuous server connection. In the case that the connection fails, the terminal automatically switches to a standalone configuration, where the game logic is generated locally and the data is stored locally in the terminal. Once the connection returns, the offline data are synchronized and the configuration returns to full-server-based, the company said.
Rowe questions the appropriateness of quickly changing out games in a tourist environment such as the Strip. "In a pub in England, that may be exactly what you need, but I don't think you should assume all those markets are equal and need the same things."
Some companies appear poised to go either direction. Aristocrat recently purchased Essnet, a company operating with a thin-client approach in the lottery world. Its ACE technology can offer a much higher level of scalability, according to Kent Young, who was the company's global marketing manager until recently and is now a consultant to the company. Such technology allows for multiple channels of distribution, including Class III, mobile gaming, Class II and allows for third parties to easily develop content for it because its open system uses off-the-shelf open architecture.
The company also put more traditional downloadable technology functionality on test at Pechanga casino-resort in Temecula, Calif. In addition, the company joined forces with Bally on a downloadable system.
At the end of the day server-based technology is important, but it's still only a tool, Young noted.
"The focus needs to be on the content. At the end of the day, the player doesn't really care what sits behind it."
Rob Bone, vice president of marketing for WMS Gaming, said the Waukegan, Ill., company plans to be a "bolt-on" to other server-based technology.
"We are a good technology company, but we're a great content company," Bone said. "We want to be a 'bolt-on' and a very flexible means for people to use the technology to create new experiences."
It is working on how it can leverage its cutting-edge game content once server-based technology comes to pass. One way it will do that is with its programmable button panel, Bone said.
"This technology, planned for debut with our WAGE-NET product suite, allows us to dynamically change the verbiage/graphics on the buttons themselves allowing for instantaneous refreshing of line counts, coins per line, highlighting of specific buttons with LEDs or potentially running animations, messaging and attract sequences," he said.
Another company, Cadillac Jack, plans to leverage its server-based technology, developed for Class II gaming operations, in the Class III world, said Kunal Mishra, vice president of product management, Cadillac Jack. "Our experience and expertise involves not only developing a platform but also refining it for the business needs of our clients," Mishra said. "Since then our solution has been optimized and it's been proven to be scalable for all our clients, no matter how big or how small."
One of the benefits to operators is the ability to get a clear picture of the inventory on their floor, all the way down to the peripheral level, Mishra said.
In addition, the operator will be able to give additional choices to players based on their gaming profile. "Once that happens, you'll be able to provide customized rewards and incentives to the player," he said.
Up next: regulatory issues and views on server-based gaming.
The Thick or Thin of It
May 22, 2007