In this first installment of a five-part series on server-based and downloadable technology, Slot Manager offers a general overview as well as observations and impressions from gaming industry insiders about where the technology is heading and what challenges must be addressed....


The concept of server-based gaming has captivated casino executives who envision a gaming floor that delivers a personalized, engaging experience for the player, optimized operations and more revenue to the bottom line.

After all, server-based gaming has been in operation successfully in Class II and lottery environments, and in the United Kingdom and Europe. Trials are under way at various traditional casinos in the United States, including some in California and Las Vegas, as developers seek to put their best foot forward.

But just how fast the technology will migrate onto traditional North American casino floors remains in question.

GLI President James Maida likens the move to server-based gaming on traditional casino floors to a baseball game in the bottom of the second inning.

Harrah's Entertainment CIO Tim Stanley compares it to a marathon, as the gaming industry strives to catch up with other industries in networking technology.

"Ultimately winning the race is some ways down the road.

I don't think the products and services we see today are anywhere near the end game at all," Stanley said earlier this year at the recent Bally Technologies' recent Systems Users Conference 4. "There's a network-based, services-based concept and component that is really where we must get to. But I'm encouraged by the fact that the industry is waking up. The regulators are looking at these technologies. And we're sort of getting into that '90s or late '80s client-server computing model right now with some hard drives and a game out there that we can connect up to a network. We're moving in the right direction."

Andy Ingram, IGT senior vice president of network gaming, said the concept of server-based gaming has been expanded since the operators and manufacturers started discussing the technology.

"When they first talked about server based gaming, it was about game download, and changing the game configuration, and the denom. The problem was the cost savings probably weren't substantial enough to pay for a new network because what I'm exchanging is slot techs for network tech," Ingram said. "In the course of figuring out how to do that, we discovered there's so much more we can do here."

"It's about optimizing the player's experience. The money's in driving more revenue, which comes from improving the player experience," he said. "From downloading games one game at a time, to downloading all games, to being able to really let the player drive the whole environment [by configuring his preferences for the appearance of the game, game type, etc.]."

The network also allows the potential for leveraging the entire casino-hotel experience, Ingram said. For instance, he said, in a network-based environment, a hotel-casino could use the server to offer players half-price tickets to a show that otherwise would be undersold. "Because of the network, I can make these dynamic offers to improve the player's experience and also drive the profitability of my property," Ingram said. "That's the power of the network."

Right now, Ingram said, the trials under way are testing the basic functionality of downloading capability, but that will change over time as manufacturers begin to show the expanded scope of what the technology can do.

A main goal will be to preserve open network capabilities. "You want it to be open, and you differentiate on the service that you offer. You want the network to be open. Where I come from open network is like a gospel," said Ingram, a former marketing executive for Sun Microsystems.

The Gaming Standards Association is helping to ensure the open network with its Game to System standard.

SUBHED: A delicate balance

Moving forward must be done carefully to ensure the technology is successful and beneficial to both operators and players, cautioned Gavin Isaacs, executive vice president and chief operating officer of Bally Technologies.

"I think there's a delicate balance there with bringing the customers along because a lot of the branding associated with the standalone products is something the customers are very familiar and want to play with," Isaacs said.

He's seen the industry pull back a bit from the initial "got-to-have-this" rush to a more "what-does-it-actually-do-for-us" approach. Bally, he said, is proceeding with "building foundations" in order to provide the ultimate best model for operators and players.

The Bally iView systems games, for instance, are a move in the direction of true server-based gaming. The company has developed the system-based games as bonus games on the interactive iView touch-screen displays that are optimized to deliver player loyalty, bonusing and marketing messages on today's gaming machines.

Some operators are adopting a wait-and-see approach.

"I think server-based gaming will have its play in technology in years to come and probably nearer than longer," said Denny Frey, vice president of information technology for Boyd Gaming, which operates 17 gaming properties.

"What Boyd Gaming has decided to do is kind of stay back and watch and see what other operators are going to do with server based gaming," Frey said at the Bally conference. "We have 30,000 slot machines. For us to go out and replace every single game with server-based gaming is huge expense item. So we've got to see the return, and we're not seeing the return. I think where we'll see the return is the games within game in server0based gaming," he said, adding the company at some point likely will trial the technology.

That major expense for operators weighs on the mind of Bally Chief Technology Officer Bob Luciano.

"The level of investment and restructuring the internal infrastructure to bring this about is just such a huge dollar amount. And when you combine that with the fact that there needs to be an offsetting economic benefit to justify that investment, my thoughts continuously revolve around how to reduce the investment level, and at the same time trying to create and focus on mechanisms that are going to cause these new technologies to generate the kind of revenues that are going to offset the investment."

Server-based gaming can provide benefit to the industry, said Kent Young, global general manager of marketing, Aristocrat Technologies.

"Initially we're going to see benefits through yield management," Young said. Just as a video store reduces the number of a particular movie title as its popularity dwindles, downloadable gaming will allow casinos to do the same in a very efficient manner.

"This technology allows the use of the content to truly optimize operations and yield on the floor, to truly have the right amount of a particular game on the floor, in the right configuration, in the right denomination," Young said. "It will allow much higher level of customer satisfaction and optimization of the whole gaming floor."

As the technology evolves, it will offer two tracks of benefits to the player - one will allow more personalization of games to the player and the other will allow communal gaming to flourish, Young said.

Aristocrat has seen success with its downloadable gaming trial, designed to demonstrate the basic functionality of server-based gaming, at Pechanga Resort Casino in Temecula, Calif., Young said.

Aristocrat also is proceeding with development of its ACE technology for Class III casinos. The technology uses a thin-client approach, where the intelligence lies on the server and the server can operate multiple channels of distribution. "There's a much higher level of scalability with this type of technology," he said. "It's all open system, open architecture."

Young noted that manufacturers and operators both need to ensure that the technology's introduction is rolled out carefully.

"There's as much downside as there is upside if it's not done properly," he said. "We have to be very careful not to go too far in introducing technology that's too difficult to adapt for the players."

So many people get caught up in the technology, Young noted. "But at the end of the day it's still about content. At the end of the day, the player doesn't really care what sits behind it. What they care about is the game they're playing, the experience they have with the game."

SUBHED: Experience counts

In the United Kingdom, more than 30 percent of the games that are running in the UK are actually run on a server-based system,

Two companies, Cyberview Technologies and Inspired Gaming Networks have been leaders in operating server-based downloadable technology on fixed odds betting terminals in the UK as well as in casinos in Europe.

In those jurisdictions, operators are used to the technology and are optimizing its capabilities. "It's not a new innovation to them," said Sylvie Linard, executive vice president and chief operating officer, Cyberview Technology, which has some 10,000 machines operating on its platform in the UK and Europe, and a deal to retrofit machines in South America.

The operators now using the technology have witnessed powerful results. "The questions they are asking us are, 'What else can it do?'" she said. "It's really now on a going-forward basis."

Linard calls Cyberview's platform a "smart client," with some intelligence at the machine level.

"The base of the system has been the same for five years. What we've done in the last year is we've developed a lot of new tools -- you're adding functions and you're adding tools for your customers… You need to be able to follow the natural evolution of technology."

Linard believes that the tipping point to get U.S. operators to move to server-based gaming will be someone to step up to the plate. "I think if one goes, they'll all follow. It's going to be like cashless [ticket-in, ticket-out adoption by casinos]," she said.

"It's all based on what business model will work for the operators. If the business model makes sense, that there are economies of scale, that they'll save money on operating costs, they'll move in that direction."

But Linard noted casinos don't have to change overnight. "You could start with only a few banks and then evolve from there."

Inspired Gaming Group touts its Open SBG platform, which offers real-time content downloads and remote terminal monitoring, delivering enhanced flexibility and responsiveness to consumer needs as well as higher uptime. The company's platform operates some 30,000 terminals in five countries for companies such as Tabcorp, Gala Coral Group and William Hill.

"One of the first casinos we put it in, it had a massive effect on their revenue," said Anne De Kerckhove, international managing director, Inspired Gaming Group.

"They were paying off their equipment in a matter of weeks rather than months. It was bringing a lot to the bottom line," De Kerckhove said.

It's all about giving the customers "a huge variety of games" and optimization of operators' game floors by such aspects as time of day. "It's about plug and play and adding on things and open platform."

Operators also reap a lot of information about their players and player behavior, she said.

"It's just amazing. Year on year we keep on improving in those casinos because we keep on learning more," she said.


Part II will examine thin client and fat client applications of server-based gaming.




SIDEBAR:

There are several different models of server-based or downloadable technology:

  • The game is played on a server, and the result is displayed on a terminal, as in Class II bingo.
  • The game is played on the machine, but the result is determined by a central computer and displayed on the machine's screen. This central determination model is in use in the New York lottery market and in Washington state.
  • The game is played on the machine and the result s determined by the machine. Game content is cownloaded by the server to the machine, and this method also offers the ability to change game configurations or to download software upgrades from a central server. Some operators and manufacturers have touted this method because if the server or network goes down, play can continue because the random number generator is on the machine itself.